Thomson Reuters/CoreCommodity CRB Index
This index is calculated using arithmetic average of commodity futures prices with monthly rebalancing. The index consists of 19 commodities: Aluminum, Cocoa, Coffee, Copper, Corn, Cotton, Crude Oil, Gold, Heating Oil, Lean Hogs, Live Cattle, Natural Gas, Nickel, Orange Juice, RBOB Gasoline, Silver, Soybeans, Sugar and Wheat. Those commodities are sorted into 4 groups, with different weightings: Energy: 39%, Agriculture: 41%, Precious Metals: 7%, Base/Industrial Metals: 13%.
The weekly chart of the CRB Commodity Index is looking extremely bearish right now. The index has rejected the 2016 low, the 50-week Simple Moving Average, and the 61.8% Fibonacci level. The rejection occurred with a textbook bearish engulfing candlestick. I wouldn't want to be holding commodities right now. The world indices and FX market are also signaling some risk aversion, so we might see commodities move lower during the next few weeks.
