Commodities Could Be Breaking Down Again (DBC)

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July 19, 2018 6:11am NYSE:DBC

From Chris Kimble: The chart below looks at the Thomson Reuters Commodity Index over the past 38-years, on a monthly closing basis.

The index has been creating a series of higher lows and higher highs over the past 15-years inside of rising channel (1). It hit the top of the rising channel (1) back in 2011 and since then it has created a series of lower highs and lower lows inside of the falling channel (2).

The index hit the top of the falling channel and its 23% Fibonacci retracement level last month at (3) and quickly turned lower.

The weakness of late now has this important commodity index attempting to break 15-year rising support at (4). Should the index continue to head lower, it could be sending a key message about global growth. Keep a close eye on the index going forward, as it could have an impact on bonds, interest rates, bank stocks, and precious metals.

The Invesco DB Com Indx Trckng FundETF (DBC) was unchanged in premarket trading Thursday. Year-to-date, DBC has gained 1.38%, versus a 5.74% rise in the benchmark S&P 500 index during the same period.

DBC currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #2 of 113 ETFs in the Commodity ETFs category.

This article is brought to you courtesy of Kimble Charting Solutions.

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