The chart above looks at the Thomson Reuters Equal Weighted Commodity Index over the past 50-years, on a monthly basis.
The index has spent the majority of the 40-years inside of rising channel (1). While inside of this rising channel the index has spent the majority of the past 7-years inside of falling channel (2).
The index hit the bottom of the channel back in 2016 and a small rally has followed, where it has reached its 23% Fibonacci retracement level of the 7-year decline and created a series of flat tops.
The index now finds itself in a very tight spot between falling resistance and rising support. What this important commodity index does with the jam the tight jam, should send a very important long-term message for this sector (Crude Oil, Metals and Grains).
The PowerShares DB Com Indx Trckng Fund ETF (DBC) was unchanged in premarket trading Tuesday. Year-to-date, DBC has gained 3.79%, versus a 0.18% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Kimble Charting Solutions.