From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
Risk assets are under pressure.
Failed breakouts and significant retracements have materialized across cyclical areas of the market, including the Russell 2000, the energy and financial sectors, and, of course, commodities.
The energy complex has endured the most severe damage in the commodities realm, with crude oil leading the pack lower. Last Friday’s session was a bruiser, with crude dropping $10 to close out the week.
This kind of volatility can be alarming for any investor.
But when we zoom out–as we like to to at the end of each month–and focus on commodities as a whole, two key takeaways come to the forefront:
- The underlying uptrend is still intact.
- A period of digestion within the ongoing trend is well deserved.
Let’s take a look at a couple commodity indexes and try to put the recent action into perspective. [Read more…]