Exercise #7


3.) Evaluate the chart of the Continuous Commodity Index (UV/Y) at Point 1. Assume you own a commodity related ETF. Which of the following strategies would be most appropriate?

C. The chart has given a sell signal so equities must be a better bet. Sell all commodity funds and place them into equity funds.

That is incorrect. This is a trend chart and thus does not speak to the relationship between commodities and equities. For that, we would need to take a look at the relative strength chart of the UV/Y versus an index like the S&P 500.

Go back to the question.