Professional Accumulation In Commodities

Previous resistance is often support during secular bull markets. Charts 1 and 2 illustrate this tendency for the CRB Spot and CRB Foodstuffs indices not only in 2008 but also 2012. The sharp decline in trend velocity towards -20% suggests an intermediate bottom is near.

Chart 1: CRB Spot And Year-over-Year (YOY) Change


Chart 2: CRBFoodstuffs And Year-over-Year (YOY) Change


Money continues to flow into agriculture, grains, and other inflation sensitive sectors as price declines. A steady rising in the agriculture’s and grain’s diffusion index readings during the price collapse reflects money inflows. This is an indication of professional accumulation.

Table 1: COT Money Flow Table