CRB, WTIC, & GOLD

Another Long Look

"You can't see the forest for the trees" is an apt description for most technical
analysts. Most just look at the daily or weekly charts without examining the yearly
and quarterly charts going back for many decades. Just by looking at the daily or
weekly charts, how do they know whether a rally is a bear-market rally or the
beginning of a bull market? Also, when a stock corrects, how do they know
whether the correction is a resumption of a bear market or just a correction within a
bull market? Hence, the importance of examining the very long-term charts can't
be overstated.
Shown below are long-term charts of the Reuters/Jefferies CRB Index, Light
Crude Oil (WTIC), and Gold. As shown in my recent reports, the CRB Index,
WTIC, and Gold are overbought on an intermediate basis and a period of
consolidation/correction has commenced. The correction for the CRB and WTIC,
however, is within the framework of a secular bull market. Hence, once oversold,
accumulation is advised. Gold’s long-term prospect, however, remains
questionable as long-term momentum appears to have peaked (see quarterly chart
for Gold). Most charts below were shown in my recent reports.
 REUTERS/JEFFERIES CRB INDEX - MONTHLY OSCILLATORS

In April 2020, a long-term buy was signalled by the Leon Tuey Timing System
(LTTS) as CRB was grossly oversold and momentum improved. Not surprisingly,
a rally ensued. Short-term corrections notwithstanding, the secular trend remains
bullish.
 REUTERS/JEFFERIES CRB INDEX - QUARTERLY OSCILLATORS

Above is a quarterly chart of CRB from 1975 to date. In the second quarter of
2008, a long-term sell was signalled by the LTTS as CRB was grossly overbought
and momentum deteriorated. In the first quarter of 2020, however, a long-term
buy was signalled as CRB was grossly oversold and momentum improved. As
CRB is far from overbought and it has crossed above the moving average of the
quarterly Bollinger Bands, further gains lie ahead.

That a secular bull market has commenced is without a doubt. First, note that
the 2008 - 2020 bear market was a five-wave affair which suggests that the bear
market was nearing an end. Second, in the first quarter of 2020, a long-term buy
was signalled. Third, the dramatic blow-off in April and the upside reversal
suggested that an important low was established. Finally, in the current quarter,
CRB has broken a five-year downtrend confirming that a secular bull market is
underway.
 REUTERS/JEFFERIES CRB INDEX VS. SPX - QUARTERLY
OSCILLATORS

Above is a quarterly chart showing the performance of the CRB vs. the S&P
500 Index. In the third quarter of 1974, underperformance was signalled by the
LTTS. In the third quarter of 2020, however, long-term outperformance was
signalled as the ratio was grossly oversold and momentum improved. Secular
outperformance has begun.
 LIGHT CRUDE OIL - MONTHLY OSCILLATORS

That a secular bull market is underway is without a doubt. Note the five-
wave bear market from 2008 to 2020, the long-term buy signal in April, 2020, and
the spectacular blow-off in April all strongly suggest that the bear market is over
and a secular bull market has commenced. Short-term corrections
notwithstanding, further, significant gains lie ahead.
 LIGHT CRUDE OIL - QUARTERLY RS & MONEY-FLOW

Above is a 40-year quarterly chart of WTIC. Note the long-base breakout in

2004, the five-wave bear market of 2008 - 2020, the long-term buy signal in the
second quarter of 2020, and the climactic blow-off in April all strongly suggest
that an important low has been established and a secular bull market has
commenced. Also, it is encouraging to note that in the first quarter of 2020, when
WTIC closed at a new low, the money-flow indicators did not confirm as they
were well above their previous lows. The non-confirmation indicates that WTIC
was being accumulated (smart/informed buying).
 LIGHT CRUDE OIL VS. VANGUARD TOTAL STOCK MARKET ETF
(VTI) - QUARTERLY OSCILLATORS

Above is a 20-year quarterly chart of WTIC vs. VTI. In the first quarter of
2020, the ratio closed at a new bear market low, but long-term outperformance was
signalled by the Leon Tuey Timing System (LTTS) as the ratio was grossly
oversold and momentum improved. In the second quarter of 2020, the ratio traced
out a dramatic bottom-reversal indicating that an important low was put in. Until a
grossly overbought condition is reached and momentum deteriorates, further
outperformance lies ahead.
 GOLD – DAILY RS & MONEY-FLOW

On the daily chart, Gold is tracing out a “double bottom”. Note on March 8, it
reached an intra-day low of $1673.30 and that low was tested this week. On
Tuesday, March 30, it reached an intra-day low of 1678.30. On Wednesday,
March 31, it breached the Tuesday’s low as it dipped to 1677.30, but ended the day
sharply higher tracing out a one-day bottom-reversal. The tests and upside reversal
clearly suggests that a short-term bottom has been put in. Strong support is
indicated in the $1670.00 - $1675 area.
 GOLD – WEEKLY OSCILLATORS

As mentioned in these reports, in the week of August 3, an intermediate sell was

signalled by the Leon Tuey Timing System (LTTS) as Gold was grossly
overbought and momentum deteriorated. Not surprisingly, a correction ensued.
As mentioned in my recent reports, however, in the week of March 1, an
intermediate buy was signalled by the LTTS as Gold was grossly oversold and
momentum improved. Encouragingly, in the week of March 8, Gold traced out a
one-week bottom-reversal. This week’s action further supports my view that an
intermediate rally is at hand.
 GOLD – MONTHLY OSCILLATORS

As shown in my previous report, in July, a sell was signalled by the LTTS as

Gold was grossly overbought and momentum deteriorated. Note Gold has broken
below the moving average of the monthly Bollinger Bands, which suggests that it
will likely test the lower Bollinger Band. As the oscillators are far from oversold
readings, after a relief rally, Gold will likely consolidate/correct further.
 GOLD – QUARTERLY OSCILLATORS

Above is a quarterly chart of Gold which was shown recently. In the third
quarter of 2020, a long-term sell was signalled by the Leon Tuey Timing System
(LTTS) as Gold was grossly overbought and momentum deteriorated.
VANECK VECTORS GOLD MINERS ETF (GDX $33.44) -
WEEKLY OSCILLATORS
 In the week of February 22, when GDX reached a new reaction low, an
intermediate buy was signalled by the Leon Tuey Timing System (LTTS) as GDX
was grossly oversold and momentum improved. Encouragingly, this week, stock
appears to have a successful test of the low and rebounded. Until a grossly
overbought condition is reached and momentum deteriorates, further gains lie
ahead.
Nimble traders may wish to initiate positions here and place mental stop below
$30.50.
 BETAPRO CANADIAN GOLD MINERS 2X DAILY ETF
(HGU $16.71) - WEEKLY OSCILLATORS

In the week of February 22, an intermediate buy was signalled by the LTTS as
stock was grossly oversold and momentum improved. Until the oversold condition
is thoroughly rectified, further gains lie ahead.
 Currently, the moving average of the weekly Bollinger Bands stands at $19.43.
A move above the moving average would favor a test of the upper Bollinger Band
which currently sits at $25.23.
Aggressive traders may wish to initiate a position at current level and add to
position on dips. Place mental stop below $14.50.
FAIR DISCLOSURE: I initiated a position this morning at $16.17.

LEON TUEY
April 1, 2021
LEON TUEY
March 31, 2021