A brief segment on commodities, as we anticipated a potential rotation from Tech leadership to a temporary revival of some of the inflation trades
Per the NFTRH trade log yesterday, I began rotating from Tech to a more commodity/resources weighted set of holdings, with the understanding that it’s still a bear market rally, with rotations going on beneath its surface. It’s a bounce folks, not an investment.
Stocks marked ‘X’ are redacted as they are subscriber content.
Commodities
With reference to the Silver/Gold ratio above and the idea that the relief rally has the potential to spread to the inflationary/reflationary stuff with a potential trigger being relief from the banking crisis headlines (which have helped ram home our deflationary view, but which gives me caution on that view, near-term) I am open to taking some temporary commodity related positions (Copper, REE/critical materials, Uranium, Energy, etc.) should that relief play start to engage.
But as of now, the status is…
CRB Index: Trending down and bearish after a breakdown through support and away from the SMA 50. Currently on a little bear flag to test the breakdown.
WTI Oil: Very similar status to CRB.
NatGas: Post-crash, still bearish but also of note it is once again probing very long-term support dating back to the 1990s. Trying to form a little pattern with positive divergence by RSI. It’s going to bounce at some point. And when Natty moves, it tends to tear ass.
Copper/Industrial Metals (GYX): Copper has risen from support to test the underside of the SMA 50. On Friday it held below. But it’s worth watching the good Doctor to see if he may prescribe a wider commodity rally. GYX is still bearish but it did take back the SMA 200, has triggered MACD and has the look of something that could bounce.
Uranium: u3o8 price tracker SRUUF is near its lows dating back to Q4, 2022. That is about all we can say about it; it’s been driven down to what would be a buy area for ardent long-term bulls. The sector (URNM) and many components are at a similar status. Bearish charts, but levels that true believers would consider adding to positions.
REE/Critical Materials, Lithium, Palladium & Platinum and Nickel: REMX has been beaten down to the lows of its ongoing downtrend. Watch item XX is down there as well and very much on watch if the commodity/resources view improves (for a trade). XX is a stock I want to hold long-term, but said long-term could be after a broad bear market plays out and they start rebuilding Ukraine and other war torn places. Battery materials Li & Ni are tanking and at support (after a decline), respectively. Watch items XXX & XXXX (Li) are at the low ends of the last year’s range much like other commodity stocks. All of this stuff appears a candidate to bounce if any relief from the deflationary grip of the headlines comes about. Nickel watch item XXX.XX has tanked to the support of the 2020 highs and for that reason, I am going to consider adding it back. But much like XX above, this is a stock I like long-term strategically as well (XXXX Ni offload agreement).
Agricultural (GKX): If there is one commodity segment I’d avoid if I get a good feel for a coming bounce/rally, it is the Ags. The chart of GKX is just plain bad. Daily, weekly, you name it. Watch items MOS and NTR are bad too, but like many commodity/resources producers they are bombed out and would probably bounce if broader commodities and inflation trades do.
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