Follow Up on CRB (with a Weekly Chart)

GR, the site admin of Huatopedia (and he’s also my sinseh…the one who introduce me to Ichimoku), provides a great insight to CRB on the Weekly Chart to my post on CRB 

And I thought, it should be shared here.


802, look at the weekly charts for the CRB index, or for some of the commodity indexes / ETFs (mainly oil, coal, agriculture), and see if you agree with my observations below:


My first observation is that prices have been consolidating for 3 to 6 months, depending on what you’re looking at. 


Using IKH, it seems that prices have cut the Tenkan sen (but still far from the Kijun sen), and the Chikou Span is close (maybe a month away) from crossing historical price action as well. We may see some whipsaw action unless we see a 10~15% bump to current prices to take the Chikou clear from the historical price. If it happens, we may get a few months’ upward movement until we hit the next big kumo. A flat Senkou Span (ie. cloud top/bottom) is supposedly a price attractor though, and I’m seeing this flat border in the upcoming clouds. So, there could be more in store yet after that.


Using MACD, there’s actually a bullish crossover (9d vs 26d) from Jan~Mar onwards (depending on which chart you look at). It’s still far from horizontal line, so this is still a weak bullish crossover, but at least that’s a start.


Volume-wise, it’s mixed. Depending on which chart you’re looking at, you could see slowed down distribution, or a bit of accumulation, etc.


Interestingly, the semicon sector seems to have the same trajectory as the commodities where consolidation is concerned. Look at the SMH ETF (Semiconductors Holders). In fact, SMH is very close to challenging the Kijun. 


Of the charts of the ETFs I looked at above, I prefer these (not necessarily in order of merit):

– KOL (Coal), OIH (Oil Services), SMH (Semicon), PBD, PBW (these two are Clean Energy ETFs), DBC (Commodities; this one is a bit further behind the rest though)


I’d like to see a good 10% ~ 15% bump on current price levels in the next month or so to get a good signal. This is mainly just based off price/Tenkan crossover + Chikou confirmation though, which is supposedly weaker than the longer-term price/Kijun or Tenkan/Kijun crossover with Chikou confirmation.





Commodities : Are we due for a rally yet?

The CRB is one of the key index to monitor the commodities trend.

With the recent USD weakening, we have seen that the CRB has form somewhat of a ‘cup-shape’ which suggest that there a bullish trend is in formation.

However, Ichimoku is telling us another story :

  1. The price level is currently inside the kumo which represents a trendless state.
  2. This is further supported by the flattening kumo and the horizontal kijun sen; that the ‘average’ moving range is range bound and there is no sign that trend has turned.
  3. However, we do note that there is a possibility that a cup-and-handle is forming. If it does formed, we want to see the price level break through the kumo together with the Chikou Span piercing through it.