From the Desk of Ian Culley @IanCulley

Natural gas futures are due for a pop.

It might sound silly as the widow-maker is falling back toward its mid-1990s lows.

But this is a logical level to witness a sustained rally. Especially when you consider previous cycles and where Natural Gas is trading relative to crude…

Earlier this week, JC mentioned the crude oil vs. natural gas ratio during an internal strategy session.

He tracked this relationship when he day-traded natty gas, using it as a mean reversion indicator.

The media is showering gold and precious metals with attention.

I get it. New all-time highs capture eyes. 

But you can’t leave copper and base metals out of the story…

Nobody is paying attention to platinum.

It’s easy to overlook while gold shines and silver rips. But during the last commodity supercycle, platinum traded at a premium to the famous shiny yellow rock (and still does regarding retail jewelry).

Platinum was a powerhouse!

From the Desk of Ian Culley @IanCulley

Commodities are hot.

Even the most ardent tech investors can’t avert their gaze from Gold’s eye-catching new highs. 

If you find yourself unprepared, don’t be alarmed. We have a plan…

Buy base breakouts.

Check out coffee futures ripping above a shelf of former highs:

We often joke that catching base breakouts like this gets us out of bed in the morning. (It’s the best part of waking up.)   

From the Desk of Ian Culley @IanCulley

Black Gold is breaking out!

Crude oil is flipping weeks of indecision into conviction following a hard retest that frustrated traders earlier this month. 

Let’s take a look…

Check out crude’s upside resolution to fresh five-month highs:

Yesterday marked the completion of a tight bull flag – a typical characteristic of an uptrend.

The path of least resistance points higher toward our 95 target. 

From the Desk of Ian Culley @IanCulley

Commodities are in the early innings of a secular bull run.

The list of raw materials hitting all-time highs since 2020 includes Gold, Copper, Wheat, Soybean Oil, Cattle,  Orange Juice, Cocoa, Heating Oil, Gasoline, Palm Oil, Lumber, Tin, Rebar, Iron Ore, and Coal. (If that roll call doesn’t scream commodity supercycle, I don’t know what does.) 

It’s an exhaustive list that will only grow in the coming years. Remember, these cycles can last decades. We’re only in year four!

Of course, there are also some laggards amongst the ranks. (ahem, Crude). But don’t lose sight of the bigger picture! 

Even Soybeans are queuing up for new all-time highs…

Check out soybean futures zoomed out to the 1950s:

From the Desk of Ian Culley @IanCulley

Metals are working.

Gold is printing new all-time highs. Copper is trading above four bucks. And Palladium…

Well, Palladium has stopped going down.

Considering Palladium’s Commitment of Traders (COT) profile, its tendency to trend with technology stocks, and where it stopped falling…

It’s time to buy!

Check out the long-term Palladium chart stretching back to the late 70s:

From the Desk of Ian Culley @IanCulley

Gold is up for the sixth day in a row – and it looks like this week’s breakout might be the real deal.

If it is — and gold continues to rip — it’s only a matter of time before copper breaks out too.

Check out the overlay chart of gold and copper futures:

Where gold goes, copper follows. Or perhaps they simply enjoy similar paths.

From the Desk of Ian Culley @IanCulley

What happened to those everyday commodity contracts the average investor follows?

I’m talking about crude oil, gold, and copper.

These days, it’s all about cattle futures, orange juice, or cocoa hitting an all-time high. 

I’m sure everyone down at the NYMEX or the folks over at the CBOT in Chicago are having a ball. But what about the stock traders trying to get a piece of the action?

Sure, the energy trade is starting to work again. But gold has been a range-bound mess since the summer of 2020. And gold mining stocks have been an absolute dumpster fire.

It just doesn’t make sense amid a commodity bull run…

No, the absence of gold and copper breakouts doesn’t make much sense, and neither does crude oil underperforming gold as interest rates rise:

From the Desk of Ian Culley @IanCulley

Commodities are making moves.

Cotton is forming a bull flag following last week’s breakout. Coffee futures are coiling below a critical polarity zone. Cattle and hogs are running wild. Even Dr.Copper is perking up, posting positive returns over the trailing five days.

And don’t forget about cocoa futures as they continue to print fresh all-time highs. 

With all this action heating up, let’s turn our attention to one of 2021’s most explosive markets…

Lumber.

Remember all the lumber memes on Twitter?

Dudes were posting their W’s sitting atop stacks of 2x4s and plywood. I’ll never forget it. 

As a trader, I prefer to avoid lumber futures. It’s a thin market. But I can’t ignore the yearlong base forming on the daily chart:

From the Desk of Ian Culley @IanCulley

Naming a newborn is tough.

Who is this tiny person? And who will they aspire to be?

These are impossible questions to answer.

As you can imagine, the wifey and I were stumped upon meeting our baby girl earlier this week. 

Every time I looked into her eyes, I could hear her plead, “Give me a name, boy!” A situation ten-year-old Ian never fathomed – even while watching The NeverEnding Story. 

After a few days of deliberation, hours of snuggles, and the casual piercing gaze, I could only discern one thing: she smelled good. 

So I offered up “Coco.” 

It was on our shortlist. Plus, will we ever forget this year’s epic rally in cocoa futures? I certainly won’t.

Well, we ultimately landed on Cora, which suits her in some indescribable way.

But if I hadn’t cut technology this week so I could focus on my girls, I might have thrown “Cotton” into the ring.

I mean – it’s the “fabric of our lives!”

From the Desk of Ian Culley @IanCulley

It’s time to turn our attention to the energy space.

The same market conditions that favored energy in Q3 of last year are brewing. 

Interest rates are rising. King Dollar is refusing to step aside.

And energy contracts – especially crude oil – are entering a historically strong period of the year.

Check out crude oil’s seasonality since 1984: