Agricultural Commodities-Where’s the Deflation in This?

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On Sunday, I wrote the playbook for the Economic Modern Family 

1. Watch Granny Retail-a failure of those key levels, spells more trouble for IWM IYT KRE. (She did not fail) 
2. Watch Semis SMH-if it pulls above $260 follow growth stocks. If it holds $240 buy dips, and if it fails $240 prepare for a bigger sell off. (Semis held 260) 
3. Watch IBB-the opportunities in this sector appear to be ripe. (IBB was not the sexy play, but will be if it clears key resistance at 131) 

I have also written a lot about hard assets-uranium (flying), silver (holding), oil (consolidating) and natural gas (basing). 

I also noted that soybeans were starting break out last week. 

Now I turn my attention to DBA, the ETF of agricultural and soft commodities. 

With CPI PPI showing inflation going down, I wish I could say the same for this chart! 

I show 2 charts of DBA-the Daily and the Weekly timeframes. 

On the Daily, the phase is bullish as the 50-DMA sits above the 200-DMA and the price is above both MAs. (PHASE) 

DBA cleared the January 6-month calendar range. (TODAY) 

Time to strike? 

While it’s not outperforming SPY, nor has it since late April, we have something to watch for. 

And momentum is in a bearish divergence with the moving averages not stacked. Plus, the red dots have t0 to clear the 50-DMA (blue). 

On the weekly charts, the price has been consolidating since the April flush. 

The phase is bullish and has been since January 2024. That is why I find the bearish calls so out of touch. 

While momentum has waned along with leadership-given the current volatility in the markets, the seasonal potential weather disruption and the global conflicts, we are watching. 

What we want to see 

1. DBA outperforms SPY on leadership (Daily). 
2. Real Motion gain momentum 
3. DBA’s current price holds Friday low 26.80. 
4. DBA closes the week at or over 27.40 

 

Educational purposes only, not official trading advice.  

For more detailed trading information about our blended models, tools, and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more. 

 

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Coming Up:  

June 17 CNA TV Singapore 

July 9 Investor’s Business Daily 

July 10 STLForex Nairobi 

July 17 CFN webinar  

Weekly podcast and appearances on Business First AM 

 

ETF Summary  

(Pivotal means short-term bullish above that level and bearish below)  

S&P 500 (SPY) 600 so pivotal 

Russell 2000 (IWM) 215 resistance 210 pivotal support 

Dow (DIA) 425 now pivotal 

Nasdaq (QQQ) 528 support  

Regional banks (KRE) 55 support 60 resistance  

Semiconductors (SMH) 260 pivotal  

Transportation (IYT) 68 resistance 64 support 

Biotechnology (IBB) 123 support 130 resistance 

Retail (XRT) 75.50 support 77 now pivotal resistance  

Bitcoin (BTCUSD) 107 pivotal support