Commodities About To Blow Up Or Blast Off Here?

Have you talked to a friend, relative, or co-worker recently about the huge run in lumber? Have you had a discussion with these people about inflation? It would be understandable if you have!

This chart looks at the Thomson/Reuters Core Commodity Index on a quarterly basis over the past 25-years.

Commodities have experienced a heck of a counter-trend rally over the past 5-quarters! The rally has commodities facing the top of its 13-year falling channel as well as line (1), which has been support and resistance for the past 20-years.

The rally over the past year so far is a rally in a 13-year bear market. 

Are commodities and inflation about to blast off or blow up at (2) similar to what Wiley Coyote has often experienced?

Keep a close eye on what commodities do at the critical price test at (2), as they will send a very important message about inflation.

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