CCI Reflects Major Bull Run in Raw Commodity Markets

Record-high crude oil and wheat futures prices, gold futures prices nearing historic highs and a sharply lower value of the U.S. dollar versus the other major currencies are a bullish cocktail that has pushed the Continuous Commodity Index to a 30-plus year high just this week. The CCI is a basket of major raw commodity futures prices rolled into one composite index price. It’s an excellent barometer of the overall trend of the raw commodity sector. Indeed, commodity market bulls are again enjoying successes after hitting a serious “speed bump” in August, when the CCI made a dramatic downside “correction” to throw a serious scare into the commodity bulls. However, the strong rebound in the CCI and the steep uptrend now in place on the daily bar chart have the raw commodity market bulls again flexing their muscles.

click on the chart to enlarge
Continuous Commodity Index
See at the bottom of the CCI chart that the Directional Movement Index (DMI) has a green ADX line reading of 34.72. Any ADX line reading above 30.00 does show a market or an index that is in a powerful trending move. However, do not be surprised to see more downside “corrections” in the CCI–like that which occurred during August–in the ongoing bull market run in commodities. Also, the posture of the CCI daily chart does suggest continuing high volatility in many futures markets–both on the upside and on the downside.
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