2016issue C0950-55

A 9/36 inflation state for a commodity and dollar basket

This case study classifies an inflation-expectation series by a nine-week versus 36-week moving-average state, then holds an equal-weight precious-metals, energy, and agriculture sleeve against the US dollar until that state flips.

The case study classifies inflation expectations by whether the nine-week moving average is above or below the 36-week moving average.
An upside 9/36 crossover cues an equal-weight precious-metals, energy, and agriculture book plus a short US dollar; a downward crossover reverses that stance.
The same reading is used to interpret the dollar, bonds, and high-dividend equities, so the indicator is framed as a portfolio-environment tool rather than a single-market timing device.
Individual commodity paths are treated as hard to forecast, which is why exposure is built as a systematic commodity-and-dollar basket.

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Current trackEqual-weight portfolio11 readings Moving-average crossover108 readings Intermarket analysis136 readings

The 9/36 inflation state

The case study first classifies the inflation-expectation series by whether its nine-week moving average is above or below its 36-week moving average.

That 9-week versus 36-week comparison defines whether the case-study book is long commodities and short the dollar or the reverse.

The equal-weight commodity and dollar book

An upside 9/36 crossover is treated as the cue to buy an equal-weight mix of precious metals, energy, and agricultural ETFs or futures and to short the US dollar. That basket is held until a downward 9/36 crossover, after which the case study reverses into short commodities and a long US dollar.

Equal-weighting here means splitting the commodity sleeve evenly across precious metals, energy, and agriculture so the trade is a diversified inflation-basket position, not a single-commodity call. The write-up argues that individual commodity paths are hard to forecast, so exposure is built as a systematic basket of commodities plus the dollar instead of a single-name commodity bet.

A portfolio environment, not a single market

The same inflation-expectation reading is also used to interpret the dollar: weaker under inflationary conditions and stronger under disinflationary conditions.

Rising inflation expectations are described as coinciding with a shift into bonds and a search for yield in high-dividend equities, so the indicator is framed as a portfolio-environment tool rather than a single-market timing device. Intermarket analysis, in this case, means reading inflation expectations through the bond market, then mapping that regime onto commodities, dividend-paying equities, and the US dollar rather than treating any one market in isolation.

Educational research material, not investment advice. Historical source context does not establish present-day performance.

5 of 10 in the Equal-weight portfolio track

20168-9 pp.Next on Equal-weight portfolioLiquidity filters, weighting rules, and index proxies in a same-category sleeveThe six-name table was a reduced working set inside a small-cap blend sleeve of more than 60 ETFs, not the full category.

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