Commodities have been an area of opportunity on the long side for months, but today we’re taking a look at a few that are at important inflection points.
First, let’s start with Copper. Prices just broke out to new all-time highs after months of consolidating…defining our risk on the long side against 541 and targeting 654 over the coming 2-4 months.
Click on the chart to enlarge view.
Also, Crude Oil is catching a bid and making new recovery highs after a failed breakdown earlier this month. This is a major positive and would suggest higher prices are ahead as long as prices stay above 3,000.
And in the Precious Metals space, Gold and Silver are both pressing towards new lows as momentum approaches oversold territory. After several weeks of consolidation, prices resolving lower is the market sending us a clear sign that prices are not ready to begin their next leg higher.
And here’s the chart of Silver. Patience in Precious Metals remains best.
Lastly, let’s take a look at Cotton. This has been a great trend since its failed breakdown in May, but exceeded our secondary objective at 20,000 and quickly reversed.
This confirms a failed breakout and bearish momentum divergence, suggesting a correction is likely in the days and weeks ahead. We’ve had a good run, but we need to take profits and not overstay our welcome.
The structural trend in Commodities remains positive, but that doesn’t mean we have to sit through every major correction or consolidation.
Rotation is the lifeblood of any bull market and we want to be paying attention to what’s currently in and out of favor.
The market is speaking. We can either listen or ignore it, but it’ll do what it wants to do.