Exercise #7


4.) Evaluate the chart of the Continuous Commodity Index (UV/Y) at Point 2. Which of the following strategies would be most appropriate?

C. Since commodities are in a positive trend, that means inflation is going higher and banks would be a good short.

C. That is incorrect. We never make assumptions that because one area of the market is doing X, another must do Y. Rather, we will turn to our relative strength charts to determine which areas are favored and which are unfavored.

Go back to the question.