Monday, March 9, 2009

Commodities follow-up

In today's column, I took a look at commodities in general and saw one undeniable fact in the charts - the long-term bull market in commodities was ended, or shall I say obliterated, in October 2008.

I have been bullish on gold for a long time, through both of its forays into $1000 territory and still own a GLD position I bought back in 2006 when the metal corrected to 570. Before I break my arm patting myself on the back, the fact that I still write 9 or 10 columns per month, 5 newsletters per week, countless articles and this blog tells you I do not own very much of it. I suppose I need a real job but thanks for letting me vent.

But looking at the old CRB chart - the one that mattered before Reuters bought it from a bankrupt Bridge Information Systems (yeah, thanks for that one management - love an employee [me]) the bull market is clearly over. The question is how long it will take for such a decline to be consolidated to allow any sort of rally to commence?

So, is gold so special that it will buck this trend? Believe it or not, deflation-istas, unlike the CRB (either version) the bull market trend here is still intact. I'll let you all draw your own chart.

As for oil, I think the column says it all.

1 comment:

barton said...

Agree completely on Gold ... it may not break through the resistance immediataly - especially if the stock market rallies - but it will break through and it will reward those who waited

Chris @studentofmarkets.com