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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

Dots

...If the dots don't connect, gather more dots until they do...or, just follow the $$$...

Stretch

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* Trade Wars have escalated and now include diplomatic wars

Thursday, May 23, 2013

The Commodity/Equity Divergence Continues

I showed a 3-year comparison of price action on the SPX to the Commodities Index (CRX) in my post of April 5th.

In it, I mentioned the correlation between the two and the instances where, mainly, the CRX would lead an ultimate drop in equities, by putting in negative price divergence before the SPX.

The following chart shows that, since the time of my post, the CRX has put in another lower swing low and has not yet made a higher swing high in its present (large) negative divergence that begins from February of this year, while the SPX has continued its meteoric climb.

If commodities continue their weakness and equities do not follow suit, I will wonder what has changed since February to cause this disconnect between the two.