When It’s Best to Keep Your Powder Dry

Why the energy sector is due for a pullback. [Jeff Clark's Market Minute]( When It’s Best to Keep Your Powder Dry By Imre Gams, analyst, Market Minute One important index that’s always on my watchlist is the Core Commodity Index (CRB). I look at the CRB to give me a snapshot of how the various commodity markets move. The CRB basket holds 19 different commodities, with the largest holdings in energy and agriculture. Precious and industrial metals make up the rest. As you might already know, [I love to trade commodities](. Because of its potential for big moves, there’s also the potential to capture big gains trading commodities… Recommended Link [BRAND-NEW: Teeka Discusses his Top 3 Plays for the NFT Boom]( [image]( Forbes recently wrote that not even the recent market volatility has been able to stop the NFT boom. As Time magazine says: “[People] are making millions on NFTs.” And according to NPR, “Silicon Valley investors say the money-making possibilities in NFTs are limitless.” That’s why Teeka Tiwari just released details on his top three plays for this historic boom. [Click here to see it.]( -- I use the CRB the same way I use the S&P 500. First, I look at the broad market to develop a general sense of where the market is going. Then, once I have a directional bias, I can narrow down the individual stocks or commodities for the best opportunities. Today, I want to see if it’s a good time to buy into the energy sector. So, let’s start with a weekly timeframe chart of the CRB… [chart] [(Click here to expand image)]( As you can see, the CRB bottomed out in 2020 and has been ripping higher ever since. The combination of low interest rates and a flood of new money printed by the Fed has been a perfect storm for commodity inflation. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. And while I think that the CRB has higher to go, it’s also time for this index to take a breather… Here’s what’s going on with the CRB’s price chart: - The CRB is about to trade into a very significant level of [resistance]( at 274.87. This level bounced prices in 2013, before the index crashed through it in 2014. This led to an eventual decline of 59%, with the CRB eventually bottoming out in 2020. Markets have long memories, and this prior [support]( level should now act as resistance as the market trades back towards it. - The price action has blown right through the upper [Bollinger Band]( (blue shaded area between the lines), telling us the CRB’s rally is now extreme. The last time prices traded through the upper band was in October. Shortly afterwards, the CRB pulled back almost 8%. If we put it all together, the technical case suggests that even if prices trade higher in the short term towards that 274.87 level, the CRB is due for a significant correction. Looking at the CRB supports Jeff Clark’s analysis that the [energy sector is likely overbought](. Sometimes the hardest thing to do as a trader is to wait patiently for the market to come to you… but it pays off. [New Financial Warning [Viewer Discretion Advised]]( Doing nothing and keeping your powder dry is just as valid a trading decision as putting your money to work. If the market respects the technical levels we’ve outlined, then we’ll have the opportunity to buy into a hot energy market at significantly better prices. Happy trading, Imre Gams Analyst, Market Minute Reader Mailbag What other commodities have you been following lately? Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com. In Case You Missed It… [The name and the #1 stock to trade in 2022]( Trading expert Jeff Clark is releasing his #1 stock to trade in 2022. (Name and ticker included.) Since he started recommending this stock, you could have used it for gains as high as 269% in less than a month and even 273%… in less than 8 days. [Click here now and get its name.]( [image]( Get Instant Access Click to read these free reports and automatically sign up for daily research. [image]( [How to Earn Free Bitcoin]( [image]( [The Gold Investor’s Guide]( [image]( [An Insider's Guide to Making a Fortune from Small Tech Stocks]( [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. 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