Inflation, Interest Rates & Indexes

Crude & GSCI Confirming Mid-December Cycle Lows; Commodity Inflation Returning?

Are Interest Rates Likely to React? What About Dollar?

What Impact Could This Have on Real Estate??

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Commodity Inflation Signals

01-24-24 Weekly Re-Lay Alert - “Inflation continues to be a driving force behind most of the markets, triggering abrupt reversals or violent swings when unexpected data emerges.? One of the key gauges of commodity inflation - described for several years in these publications - is the Goldman Sachs Commodity Index (pictured above).?

With its heavier weighting in energy markets, the GSCI often mimics the movement in Crude Oil… but there is enough of a divergence (caused by the inclusion of many other commodities) that each is worth analyzing separately.? Only after that has been done should similarities be examined.

As detailed in early-December 2023, the GSCI - AND Crude Oil - were both forecast to bottom on December 11 - 15, ’23, when a myriad of cycles converged.? The GSCI was projected to retest and briefly spike below its March, May & June ’23 lows before setting a bottom.? The December 13, 2023 Weekly Re-Lay Alert stated:

The GSCI and Crude did bottom in perfect lockstep with those cycle lows in mid-December, shortly after Gold & Silver had surged into early-December cycle highs - setting multi-month highs.?

In the process, the GSCI precisely held (again) range-trading support - projecting a rebound back toward 572/GNX - the midpoint of its latest range.? That is where that index found support in August & October ’23 and - after breaking below it - found resistance in Nov. ’23… creating a level that is also 4th wave of lesser degree resistance (the high just before the final decline).

The GSCI is likely to also find monthly 21 Low MAC resistance (in February) and weekly 21 High MAC resistance (in coming weeks) near 572 - creating a key level where a rebound peak could take hold.? That could usher in the next phase of a deflationary cycle - leading into July 2024, when a bottom is most likely.

In the interim, other markets could provide corroborating trends and signals in both directions…

Crude Oil, Unleaded Gas & Heating Oil continue to hold above the lows set on Dec 11 - 15th - ~3 months/~90 degrees from the Sept 11 - 15th high.? That completed a 50% retracement (in time) of the larger advance from mid-March into mid-Sept.? It also coincided with when the GSCI was forecast to set a multi-month bottom.?

That low fulfilled a ~7-month high-high-low-(low) Cycle Progression and an over-arching ~9-month high (June 13 - 17, 2022) - low (March 13 - 17, 2023) - (low; Dec 11 - 18, 2023) Cycle Progression.

As long as those lows continue to hold, the energy complex should move higher into the middle part of February - the next phase of a ~5-month/~21-week high-high-high-(high) Cycle Progression and a .618 rebound in time.?

Depending on the level of that expected high, oil markets could signal a subsequent decline into July 2024 - when GSCI cycles also project a bottom.”????

-- End January 24, 2024 Weekly Re-Lay Alert

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Yesterday’s Weekly Re-Lay Alert reiterated what cycles and technical analysis have been projecting throughout 2023 and into early-2024…

The primary conclusion was that Crude Oil would peak in lockstep with a myriad of weekly & monthly cycles, colliding with a consistent ~5-Year Cycle… all portending a major top in mid-September 2023.

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The Goldman Sachs Commodity Index (heavily weighted in energy markets) was projecting something similar.

That was forecast to trigger a sell-off into mid-December 2023, when a multi-month low was projected.

Crude & the GSCI peaked precisely on September 11 - 15 and plunged into December 11 - 15th, when they both bottomed.?

That was forecast to spur a rebound into February 2024 and back to key resistance levels and upside targets.

More importantly, both are setting the stage for what has been projected for February - July 2024 - when many markets (and their corresponding cycles & technical analysis) are warning of a significant economic shift.?

This also fits with related expectations for the US Dollar, Gold & Silver, Bitcoin & Cryptos… as well as Bonds, interest rates and multiple commodities.

Already, several of these markets are pinpointing the most likely period for a market ‘shock’ that could be a result of a geopolitical or economic surprise.

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Is a 2024 ‘Black Swan’ on Horizon?

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Specific analysis, targets, cycles & projections will continue to be published in related Weekly Re-Lay & INSIIDE Track publications.

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