The Thomson Reuters/Jefferies CRB Index (TR/J CRB) (thank you wikipedia) – is a commodity price index. It was first calculated by Commodity Research Bureau, Inc. in 1957 and made its inaugural appearance in the 1958 CRB Commodity Year Book.
The Index was originally composed of 28 commodities, however there has been a continuous adjustment of the individual components used in calculating the Index since the original 28 were chosen in 1957. All of these changes have been part of the continuing effort of Thomson Reuters to ensure that its value provides accurate representation of broad commodity price trends.
The index comprises 19 commodities: Aluminum, Cocoa, Coffee, Copper, Corn, Cotton, Crude Oil, Gold, Heating Oil, Lean Hogs, Live Cattle, Natural Gas, Nickel, Orange Juice, Silver, Soybeans, Sugar, Unleaded Gas and Wheat.
Generally commodity prices move opposite to bond prices. This is because inflation causes commodities to increase in price while devaluating the price of bonds. This is one of the reasons that the CRB is so closely watched by both bond and commodity traders. – AND BY KONG.
When you step back from the day to day “mindfield” of the SP 500 – it gets much easier to see what is “really going on” and you can trade with a greater sense of confidence. If somone asked me today “Hey Kong – do you think the price of things (commodities) on this planet are getting cheaper here moving forward? or more expensive?”
I’d have to be careful not to punch them in the face.
Watch the $CRB – It “IS” Important.