From the ChartWatchers blog:
Recently, the IMF Leader - Christine Lagarde - talked
about deflation. She announced we must do all we can do prevent
deflation from occurring. In Davos, the IMF released their 2014 World
Economic Outlook. Look at the trend they predict for commodities.
That report can be found here. IMF WEC Davos
Even presidents don't trust economists. Truman asked for a one armed
economist so they could stop referring to 'On the other hand...'
The charts are our best tool to see the current picture in relation
to the past. Unfortunately for the commodity countries and currencies,
the chart patterns align with the economists views. But how many
economists realize the strong negative global alignment of the
currencies and the commodities ? More importantly, do they realize the
macro charts are all breaking through support together? Look at the
chart below with the Canadian Dollar, the Aussie Dollar, the Brazilian
Real ETF, the Emerging Market Currencies ETF ,and the grey shaded area
is the Commodity Research Bureau Index of 19 commodities.
These are major support levels that are breaking whether you rely on
the blue line head/shoulders patterns or just flat horizontal support
and resistance lines. Are they permanent? No. But until they get bullish
as a group and start reversing these long term scenarios, we have to
stay with the trend we are in.
Some of my recent blog postings have been discussing the XMA.TO which tracks materials. This should be the next sector to break out
higher as the industrials had a fabulous year last year. One concern
is XMA.TO seems to start every January since 2010 with a roar, then roll
over and move lower....MORE
