Above is a daily chart of the CRB index and below that is a ratio line of the CRB index vs the S&P500. Since October, commodities have been outperforming the S&P as can be seen by the rising ratio line. A rising ratio line means commodities (CRB) are doing better than the S&P.
Notice now there is a bull flag formation in the CRB. I'm already bullish on gold stocks. If I am right and the CRB does have another leg up, I think it will be gold that will cause the CRB to rally. See my post from Saturday which talks about why I am bullish on the XAU.
Sunday, November 25, 2007
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