The Most Important Chart in the World

I think the $CRB index of commodities is due to rally, especially the agricultural commodities.  Friday presented me with a very low-risk entry in DBA, with a stop less than 1% below my entry of $24.80, so I took the trade.  (Keep reading to see the very important chart I’m talking about.)

I’ll start with the $CRB index.

CRB bottomI

It might take a couple weeks for DBA to turn around.  That’s OK.  I will respect my stop and wait.

DBA trade stop


With few exceptions,agriculture responds inversely to the US Dollar.  So it would help our cause if the US Dollar breaks down here.  I think it will.

Ag inverse of USD


dollar chart weak


And now I present the most important chart in the world right now.  And certainly the chart Ben Bernanke is most concerned with.

yields spiking


So if smart money is anticipating a weaker dollar, it should be good for gold, right?  It should be.  But gold remains too difficult a trade to take right now.  I’ve basically decided that I need to see real evidence that the downtrend has ended and a new uptrend has started before I put money at risk in the precious metals.  More to the point: Gold does not provide us with the tight stop of the DBA trade.

gold too hard


I hope you enjoyed the report.  I encourage you to sign up for free email and Twitter updates so you’ll never miss updates like this or trade alerts like that I sent out Friday afternoon.  I never share email addresses with anyone.



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