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This Index can be used as another tool
in our technical analysis arsenal to determine where gold and silver prices
might go next. We often use seven key proprietary signals that are always
moving, some occasionally in opposite directions, to provide a forecast as to
where the gold price might be going next in the market place. The CRB
Commodities Index is one of them.
Crude oil is approximately 50% of the
entire weighting for the CRB Commodities Index. Since oil has so much pricing
power within the Index, the other Index market components including precious
and base metals (along with grains and softs) make up the minority balance.
The price effects are then more
obviously energy driven compared with any other market within that Index.
However, since large commodities funds tend to buy the basket of the CRB or a
similar custom-designed basket, exclusive to the fund investor, precious
metals normally get a big boost when crude oil and related CRB markets rise
in unison.
Despite being mostly driven by crude oil
prices, the CRB direction is a useful signal to find potential support and
resistance reference points for gold and silver prices.
The CRB Commodities Index (CCI Index
(ICE US) February 2013 contract (NYE) has just completed a full selling
retracement and has based at 550. The last price on this contract for 1-7-13
on the weekly price was 552.00. Technically, from our view, a firm price base
has been established and we should expect another rally to begin some time this week or next.
The remaining caveat affecting most all
markets in January and February 2013 would be the United States debt ceiling
debates and arguments. This is a very unusual and powerful event with the
innate capacity to move all markets into choppy trading. Further, depending
upon the reflective news and related fall-out from the debate, we could very
well see irrational market moves and trading that can overshoot or undershoot
suspected technical normalcy.
In other words: get ready for some huge
non-trending volatility, some of it totally irrational.
Crude oil quality and original location
define values.
The Wikipedia definitions shown here
sort out the sources, values and potentials for crude oil sources located
throughout the world. Light crude oil has more value as it is sought after
for producing a higher yield of refined gasoline. Location has strong price
effects on transport.
“The petroleum industry generally
classifies crude oil by the geographic location it is produced in (e.g. West
Texas Intermediate, Brent, or Oman), its API gravity (an oil industry measure
of density), and its sulfur content. Crude oil may be considered light
if it has low density or heavy if it has high density; and it may be
referred to as sweet if it contains relatively little sulfur or sour
if it contains substantial amounts of sulfur.
“The geographic location is
important because it affects transportation costs to the refinery. Light
crude oil is more desirable than heavy oil since it produces a higher
yield of petrol, while sweet oil commands a higher price than sour
oil because it has fewer environmental problems and requires less refining to
meet sulfur standards imposed on fuels in consuming countries. Each crude oil
has unique molecular characteristics which are understood by the use of crude
oil assay analysis in petroleum laboratories.
“Barrels from an area in which the crude oil’s molecular
characteristics have been determined and the oil has been classified are used
as pricing references throughout the world. Some of the common
reference crudes are:
·
West Texas Intermediate (WTI), a very
high-quality, sweet, light oil delivered at Cushing, Oklahoma for North
American oil
·
Brent Blend, comprising 15 oils from
fields in the Brent and Ninian systems in the East
Shetland Basin of the North Sea. The oil is landed at Sullom
Voe terminal in Shetland. Oil production from
Europe, Africa and Middle Eastern oil flowing West tends to be priced off
this oil, which forms a benchmark
·
Dubai-Oman, used as benchmark for Middle
East sour crude oil flowing to the Asia-Pacific region
·
Tapis (from Malaysia,
used as a reference for light Far East oil)
·
Minas (from Indonesia, used as a
reference for heavy Far East oil)
·
The OPEC Reference Basket, a weighted
average of oil blends from various OPEC (The Organization of the Petroleum
Exporting Countries) countries
·
Midway Sunset Heavy, by which heavy oil
in California is priced
There are declining amounts of these
benchmark oils being produced each year, so other oils are more commonly what
is actually delivered. While the
reference price may be for West Texas Intermediate delivered at Cushing, the
actual oil being traded may be a discounted Canadian
heavy oil delivered at Hardisty, Alberta, and for a
Brent Blend delivered at Shetland, it may be a Russian Export Blend delivered
at the port of Primorsk.” -Source Wikipedia
free encylopedia
Follow CRB Index Charts in the Longer
View to Discover Calendar Rallies
Investors and traders can pinpoint
potential trading dates in advance by using the CRB larger chart display over
years or, at least one year. Not always, but most of the time, the rallies
and sell-offs fall within consistent time periods each year.
If you can discover those dates you can
prepare to invest and trade the CRB basket market components for more
accurate and successful trading.
Hard Assets are Best Investment - Not
Fiat Paper
It is obvious to us hard assets are the
answer. It all starts with physical gold and silver.
Somebody please tell us when global bond markets crash for good and
we’ll tell you when this can all get better and we start over again,
maybe with a gold-backed currency. –Trader Rog
Roger Wiegand
www.webeatthestreet.com
Contact Claudio Bassi, at Trader Track’s New York City publishing
offices for a trial subscription. Call
718-457-1426 Monday through Friday, 9:30am to 5pm or,
e-mail cbassi@miningstocks.com
Recommendations made in “Trader Tracks”
are exclusively those of Roger Wiegand and the
publication is also exclusively the editorial content provided by Roger Wiegand. TAYLOR HARD MONEY ADVISORS, INC. (THMA)
LOCATED AT 33-42 61ST STREET, WOODSIDE, N.Y. 11377, ASSISTS IN THE MARKETING
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should not be construed as advice to meet the needs of any particular reader
or subscriber. Opinions expressed in Trader Tracks are statements of judgment
expressed at the date and time they were written, and as such, are subject to
change without notice. Roger Wiegand is not a CFA
nor an investment advisor, but a private individual who studies the markets
extensively and offers summary opinions. Before any type of investment is
made, you should always seek advice from your attorney, CPA, registered
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