Cycle Trading

The commodities have been printing their yearly cycle lows. It began with oil.

Oil was in a triangle consolidation. Often times the cycle low forms in the apex of the consolidation, which was the case here. Oil put in its yearly cycle low in April

Gold, precious metals, the Miners and Copper all printed their yearly lows in June.

Granted the precious metals, except silver, have not printed a monthly swing low yet. But they are forming right translated daily cycles and behaving as if they are emerging from yearly lows.

Now it seems that Natgas and Agriculture is joining the party.

At 16 months, Natgas is forming a bullish monthly reversal.

And we see at 14 months Ag is also printing a bullish reversal.

And this can all be summed up by the CRB Index

The CRB printed its three year low in June 2012. It then printed a higher yearly low this past June and is now on week 9 of a new yearly cycle. The CRB has breached the declining multi-year trend line is on the verge of reclaiming the 50 MA.

A clear and convincing break above the declining multi-year trend line will signal a new bullish trend in commodities. I think that we will see a clear and convincing break when the dollar makes its clear and convincing break below its multi-year trend line.

With the yearly cycle low forming in June that makes August month 2 of a new yearly dollar cycle. August has already formed a monthly swing high. On top of that, the dollar is on month 27 of its three year cycle and due to begin its journey into its three year low. A break of the grey trend line confirms that the dollar is moving into its three year cycle decline.

Often times the decline into the three year low is a rather nasty affair for the dollar
And a rather bullish time for commodities …