Commodities have been fan favorites among investors this year, with gold and oil being two of the most popular trades on the market. And according to one technical analyst, the rebound in commodities could point to rising inflation.
Looking at longer term charts of the Consumer Price Index and the Commodity Research Bureau index, Piper Jaffray's Craig Johnson points to the significant relationship between the two.
"When you look at our longer-term chart going all the way back to the 1990s, you'll see that when we have a turn in the CRB index, usually you will see a turn in the CPI index six to 18 months later," he said Thursday on CNBC's "Trading Nation." "What I've started to notice ... over the last several months is a pretty meaningful turn in the CRB index."
This "turn" Johnson refers to is also notable given how many of the CRB's components have made it individually. The CRB is made up of 19 commodities components, 39 percent of which are energy commodities, 41 percent are agricultural and the rest are metals.
"It's not just oil, it's a broad-based turn in the entire CRB index," he added. "Couple that together with a 4.7 percent unemployment rate right now in the country and possible wage inflation coming, to me this really underpins the notion that perhaps we should be looking for inflation, not deflation, as we look forward to coming months and quarters."