From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
Commodities have been on an absolute tear, with our Equal-Weight Commodity Index up almost 40% over the trailing year.
But ever since Q2, the vast majority of the space has been chopping sideways along with most cyclical assets.
Sounds a lot like stocks, doesn’t it? And while we’re still yet to see any major resolutions from equities, we have seen some bullish developments in the commodities market of late.
Energy asserted itself as the new leadership group with a series of major breakouts. Both crude and heating oil broke to new six-year highs, while gasoline futures completed a seven-year base.
Then there’s natural gas, which gained more than 25% during the trailing month and tested its 2014 highs just above 6.
The emerging leadership from energy comes as no surprise, as we noticed signs of relative strength last month.
Now that it’s here, what are the implications for the rest of the commodity space and global risk assets?
Let’s take a look at a couple of charts to see what information we can glean. [Read more…]