Go long.

8/25/2022

On a daily basis (at least, when I’m not traveling), we look at short term trade ideas here.

Parabolic runners… swing trades… reverse split to low float spikes…

That’s all well and good, however, we should take a moment to look at the BIG picture as that’s what creates real wealth…

(Source: tenor.com)
With the state of the economy being what it is, it only makes sense that traders are looking to commodities…

…and if you talk to or know any research analysts, they’ll tell you all about the already burgeoning “super cycle”.

In other words, we should pay attention to commodities for the long term…

If you’re not familiar with the Bloomberg Commodity Index (AW), welcome to the party:

It’s been a while since we’ve looked at one of these, but above is the Weekly chart.

This is a good time to start looking at the broader commodities space and, over time, we’ll take a deeper dive into the specifics within the space.

At the very least, be thinking about EVs and alternative energy… and oil… lots of oil.

This is going to be a quick and dirty breakdown as the weekly chart allows for some wiggle room.

There’s also the fact that you’re likely looking at ETFs such as Invesco DB Commodity Index Tracking Fund (DBC)…

Still, AW shows us where things are headed.

Notice the trendline? Up.

Resistance? Never heard of her.

There’s nothing but support at the moment, but don’t be fooled into thinking this only goes up from here as commodities are due for some sideways chop.

From what I see, I believe AW forms a Bull Pennant (I’ve drawn this in) with the new level of Resistance sitting around the ~135 mark.

(*Idea: Sell premium and swing trade.)

Now, my focus is on Chris Hood’s Squeeze 4-Pack which is the indicator showing four rows of varying degrees of red and green dots…

I lean on this indicator quite a bit.

(It brought me a 52% gain on SNOW in less than 30 minutes yesterday.)

The green and red histogram above it on the Squeeze Trading Tool 1.2A are condensed into four different periods to illustrate a sort of composite momentum…

Green is good.

But on the Squeeze 4-Pack you can get a look at the momentum briefly switching to the upside, although there’s not a ton of strength which is why I say we should expect some chop.

The Stochastic line is yellow and sitting under the zero line and, if you look at the volatility indicator below, I’ve drawn in a black dotted line to show the increasing volatility (green bars).

Remember, this is the weekly chart, so there’s plenty of opportunity to trade this in the short term.

As for the longer term play, I’d watch for a strong break out of the pattern for a measured move higher (black arrows).

We’ll start digging into the various commodities industries in the days to come…

Have a great weekend and shoot me a message if you’ve got an idea.

Keep moving,

(Disclosure: I hold no position in AW.)

This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.

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