From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
Overhead supply is a theme we’re seeing all over these days. And this isn’t just true for the stock market, but it’s also dominating the commodity landscape.
Crude Oil reached our objective of 76 and turned lower. Copper remains stuck below its former 2011 highs. And Gold has been an absolute mess since peaking last August.
Even the few commodities that have recently broken above resistance zones — such as Gasoline and Heating Oil — have yet to follow through and confirm their new highs in any meaningful way.
Remember, commodities have enjoyed some explosive moves over the past year. Now, many are at logical levels to pause and digest recent gains. This is healthy stuff. Normal market behavior.
And when we consider the recent US dollar strength as an added headwind, it makes plenty of sense to see commodities continue to cool off and correct.
But even under these choppy and mixed conditions, we have found a favorable risk/reward opportunity.
Let’s take a look… [Read more…]