Detailing Deflation: A Flyby of 8 Declining Commodity Charts

You’ve heard the increased discussion about “Deflation” in the global economy, but what does that mean?

Let’s take a quick fly-by view of 8 Commodity Charts and see what’s happening and how to put this in context.

We’ll start with four commodities hit worst by declining prices:

A Deflationary Environment is marked (in simplest terms) by declining commodity prices.

We’ll just keep the discussion here in terms of commodities and their charts of continuous contracts in the futures market.

The goal is to broaden the headlines beyond “The Collapse in Crude Oil” and see how other commodity charts are affected along with crude oil as ongoing downtrends continue.

First up, we have four “worst hit” commodity markets which include Sugar, Wheat, Oats, and of course Crude Oil.

All of these markets are at or near fresh new lows on their price charts as we begin 2015.

While the headline news focuses understandably on Crude Oil, the price decline is not limited to this popular market.

Let’s look now at four additional commodity charts that are not quite at fresh new lows but still declining:

Coffee has remained flat while Soybeans and OJ futures have declined through 2014 and again into 2015.

While Gold has trended down, late 2014 brought a powerful reversal and recent strength into the precious metal.

This post isn’t meant to be a future-forecasting update but just a quick fly-by of commodity charts you probably don’t view on a daily (or perhaps weekly) basis.

Also, these charts simply show the price trends in related markets from 2014 to the present – about one year.

If any of these markets – or the broader perspective – is of greater interest to you, be sure and view weekly charts.

While there are many complex ways to view the global commodity picture, it’s often best to start with simple pure-price comparisons and build from that foundation.

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).