From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
Commodities continue to churn as they digest recent gains. This has been a recurring theme over the past several weeks.
However, there are signs that this might be changing.
For instance, Lumber pushes to new all-time highs, Steel futures hit new highs, and Platinum is back above a key level of resistance.
Pockets of renewed strength have started to pop up across various groupings within the Commodities space. That's valuable information.
Consider Rebar Futures forcefully breaking out of a 3-year consolidation while most of the market chops sideways.
Both Lumber and Rebar futures hitting new highs screams global growth. Strength from these markets bodes well for other procyclical areas such as Energy and Base Metals and the rotation into cyclical areas of the stock market.
While Base Metals like Copper, Tin, and Steel form tight consolidations, and Crude Oil and Gasoline press against overhead supply, we can look to Lumber and Rebar as potential leading indicators suggesting the higher probability outcome is to the upside.
Though most areas of the market are a total mess, our bias on Commodities, and risk assets in general, remains bullish.
As we head through the next Quarter, we will continue to review the Commodity space for valuable information to apply across all asset classes.
Thanks for reading. Let us know what you think, and be sure to check out this week's Commodity Report!
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