Throughout 2014, my commentaries warned of no bottom in commodities until near year-end. Gold got an early start in November, but, looking at the S&P GS commodity index, it appears the remainder of that group found a low in January. However, while this may be a tradable rally, cycles point to the bear market getting started again later this year.
February looks positive for commodities until an 18-week-cycle high comes due near the first week of March. While the index can be expected to have its ups and downs throughout the year, the trend should be up until a 22-month-cycle high in October, after which a three- year-cycle will begin to exert a downward pull into a low no sooner than the end of the year (see chart below).
Globally traded commodities are priced in US dollars, and, thus, are expected to price inversely to the dollar. A 40-week-cycle low due, ideally in September, is close enough to the 22-month-cycle high in commodities due in October to lend confidence to the forecast for a tradable rally in commodities until this fall. Last Thursday was a short-term cycle low in the dollar, but the next short cycle high is due this Friday.
#####
The February Lindsay Report is now available at Seattle Technical Advisors.com
