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Ag Commodities Breaking Out

Commodities have been under performing for the past year. They’re actually trading below the depths reached during the Great Recession.

Things may be turning around as the broad commodities index is starting to move up.

I’m particularly interested in Agricultural commodities and have opened a position today.

Ag commodities appear to be breaking out. They’re above the 5 & 10 day moving average and about to clear the 50 dma (see chart). This is an encouraging sign, especially in the face of an appreciating US dollar.

Risk seems minimal with long term support at around -2%, certainly less uncertain than the S&P500.

For similar reasons, I have also initiated a position in the US Dollar. Even if the Fed drags its feet raising rates, the other Central Banks will keep printing for the foreseeable future.