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.
It might take a couple weeks for DBA to turn around. That’s OK. I will respect my stop and wait.
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.
And now I present the most important chart in the world right now. And certainly the chart Ben Bernanke is most concerned with.
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.
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