1) Technical analysis is less valuable with indices than with tradable issues.
2) The longer the timeframe of the chart the less valuable the short term trading information.
3) In the instant case, commodity prices are just one input into economy-wide inflation or deflation.
So why'd I use this chart? Overall Kimball does a pretty good job of pointing out possible inflection points.
From Kimball Charting Solutions:
CLICK ON CHART TO ENLARGE
On a day the the job report was much lower than expected and has caused a few to ponder if the economy is slowing down or if growth will remain strong. The CRB index has formed a multi-year pennant pattern which is about to end. The trillion dollar question remains, will we be experiencing INflation or DEflation in the near future?
Pennant patterns suggest one thing....A BIG TIME move is ahead, they are not good at suggesting which way. The argument these guys are having could be resolved very soon!
