Commodities...Time to Catch a Falling Knife?

08/19/2014 7:00 am EST


By charting historical performance, Chris Kimble of Kimble Charting Solutions notes that the commodities index has been soft in comparison to the stock market for over four years and outlines what that could mean for commodities traders moving forward.

Commodities ETF (DBC) has been a little soft over the past seven weeks, losing around 7% in price (-2% YTD), while the S&P 500 (SPX) has been flat (lower chart).

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The top chart is the TR Continuous Index, which finds itself testing dual support, one of them being a 14-year rising support line

This index has been soft for the past four years, while the stock market has continued to rally. In the big picture, what happens here could be very important for commodities overall direction in the months to come. 

Some believe in the idea of buying low and selling higher. Is now the time to "Catch a Falling Commodities Index?" 

By Chris Kimble, Founder, Kimble Charting Solutions

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