Trading Strategy – Invesco DB Commodity Index Tracking Fund

One of the noteworthy developments in recent days has been the move in commodities.  Gold prices slumped to three-week lows on Friday as the dollar strengthened.  Spot gold was down more than 1.5 percent and hit its weakest since May 21.  Oil prices fell sharply last week as two of the world’s biggest producers, Saudi Arabia and Russia, indicated they were prepared to increase output ahead of an OPEC meeting in Vienna next week.  U.S. light crude ended Friday’s session down $1.83, or 2.7 percent, to $65.06.  As such, the Invesco DB Commodity Index Tracking Fund (DBC) fell 2.43 percent Friday, bringing its YTD gains down to just 4 percent.  Now the question is whether recent pullback is a pause that refreshes or it’s a beginning of something worse?  Below is an update look at a trade in DBC.

The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges.  As shown, the underlying is in a short-term bullish trend when the price bars are painted in green.  The underlying is in a short-term bearish trend when the price bars are painted in red. 

Chart 1.1 – Invesco DB Commodity Index Tracking Fund (weekly)

Our “U.S. Market Trading Map” painted DBC bars in red (sell) – see area ‘A’ in the chart. Over the past few weeks, DBC has been trending lower after the early 2016 rally ran into resistance at the spring 2015 highs near 18.50.  Last week’s selloff pushed the DBC down to support at the 2017 rising trend line.  This level was tested several times…Click here to read more.

You see, our trend-following system is very unique as it attempts to pick turns before others see them. Timing is everything and if you’ve applied our system correctly, you should have made a killing in any markets.


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