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Who says cycles don’t exist? Right now, we put cycles on full show by trying on the efficiency of two of crucial asset courses: Equities and Commodities.
The chart under takes a long-term “month-to-month” view of the efficiency ratio of the Index/Thomson Reuters Commodities Index.
As you’ll be able to see, a few long-term tendencies have been in play over the previous 25 years. Furthermore, appears like cycles of 12 years a bit (Commodities lead, then S&P 500 leads).
Presently, a pennant sample appears to be nearing completion at (1). The final time this sample was in play, a long-term development reversal happened.
Will equities proceed to indicate power and we see yet one more breakout or will equities wilt within the face of commodities and break down.
In my humble opinion, what occurs at (1), might ship an important message about funding allocations. Keep tuned.
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