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First off, I view the entire monetary and financial system as something of a Ponzi scheme. Starting with currency that is debt, and running straight though a global economic model that is based on a premise of infinite growth in a finite world. This won't end well. I'd go a step further and... More
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  • Commodity weakness near breaking point 0 comments
    Jun 24, 2011 1:22 PM | about stocks: DEE, AGA, DBC, DBA, JJG

    As the U.S. Dollar pushes higher, the commodity space is breaking key support trendlines.  Chris Kimble has been noting weakness within grains and the commodity space as a whole.  After a vicious sell-off and partial recovery yesterday, the commodity space is showing further weakness today.

    Light Sweet Crude futures have broken under a rising price channel that has been in place since 2009:

     

    The grains ETF, JJG, has clearly broken to the downside of a flag pattern:

    The broader agriculture ETF, DBA, stalled out at a 61% retrace of its 2007 high, right on falling trendline resistance.  It is now breaking a 3x support price level (near the 50% Fibonacci retracement) after having already broken trendline support:

    The broad commodity ETF, DBC, is breaking price support in a similar fashion to DBA:

     

    This action is almost certainly tied to the U.S. Dollar rally, but it might also indicate the possibility of deflationary risk returning.  Two ways to play this breakdown from the short side are DEE (broad commodity 2x short) or AGA (broad ag 2x short), though both have painfully thin volume.  

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  • Added DBA yesterday as it appears to have bullish broken above its recent downtrend resistance.
    Jul 14, 2011
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