From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
Rotation is the lifeblood of any bull market.
If a sustained uptrend is going to persist, then we need to have broadening participation… or at least some healthy rotation.
And that’s exactly what we’re seeing within commodities right now.
As the energy group chops sideways and base metals hang tough, we’re starting to see signs of strength from one of the worst-performing areas over the past year.
Softs.
Like livestock last week, it appears this group of commodities are ready to play catch-up as they turn the corner and head higher.
Considering the fact that other groups are simply consolidating or correcting through time instead of price, we’d argue that this looks more like an expansion in participation rather than rotation. But it’s really just semantics. It’s all bullish at the end of the day. Let’s dive in.