Suddenly it’s all about “Commodities”

Have you watched business television lately? If so then you know that the word “commodities” is all over the news as the “best” trades these days. What’s interesting is that the term is being used as an all encompassing category for the metals and energy markets. But what about the other commodities? What about the meats and the grains and the tropical markets? Are they not commodities as well? Indeed they are. And if you have been paying attention to my forecasts then you know that I have been forecasting a new and virtually across the board bull market in commodities for quite some time now. Why? Because there has been a confluence of many different fundamental and technical factors which have all combined to give us the current commodity bull market. Among the most two cogent and compelling reasons for the almost pervasive bull market are the following:

• Commercials traders as evidenced by the Commitment of Traders Report have for many months been accumulating long positions in many commodities. In some cases (i.e. natural gas) their buying has been the largest and the longest on record. And

• There is international concern about the possible further erosion of traditional “investments” such as stocks and real estate given their obvious and often serious erosion in value. This has resulted in a good old fashioned move to tangible assets such as gold and agricultural commodities

All of these developments are consistent with the chart that I have been showing you for quite some time now. Specifically, the CRB (Commodity Research Bureau) chart has been telling me that:

• Commodity prices have been severely undervalued as they declined in lock step with declining stock and real estate values. The forces liquidation of commodities in an effort to raise capital required to support losing positions in other markets has, in my view, been responsible for the decline. Traders are now “coming to their senses” and realizing that “real commodities” will always have value compared to often worthless stock certificates. This is not to say that there is no money to be made in stocks or real estate. On the contrary – I believe that the opportunities are the best in decades. But what really matters is what the markets are saying and not what I’m saying.

• The CRB cycle ideal low of which I warned you many months ago, has been upon us for several months and as a result it should come as no surprise to readers of this report and followers of my work that commodity prices are soaring.

But I have a warning for you. We know that jumping on the bandwagon is a dangerous thing. You want to be on that wagon when there is plenty of room.

When the bandwagon is loaded and others are jumping on, the space gets crowded and people begin to crush one another. The wagon gets overloaded and some traders fall off. The danger of an accident increases and when the wagon has more space it will be time to get on. And so my advice is as follows:

1. If you have been long many of these markets then it’s time to take at least 33% of your money off the table and to place stops on the rest of your positions
2. If you have not been long then be careful NOT to fall victim to the lure of the bull markets and the panic buying that is now taking place by late comers who are afraid that they will miss the coming moves
3. Be patient. Sit back and evaluate the markets using the objective technical tools that you have learned from me
4. Avoid the bull fever that is sweeping the commodity markets
5. Be objective and avoid the panic that may be prompted by all the talk of devaluation, inflation, deflation,currency upheaval and political instability
6. Remember that the markets are more volatile than ever before. You may be right in your expectations but you may be WRONG in your trades because your stop losses have been too small. In markets like these the small stop will be your WORST ENEMY. These markets require huge stops in order to avoid being knocked out of positions by random and emotional price swings. Be prepared and be forewarned
7. If you plan to enter trades then use emotionally prompted sell offs as opportunities to get in at or near technical support levels and most of all
8. WATCH DIVERGENCE indicators as key trigger methods for finding significant tops and bottoms in all of the markets. There are times when some indicators work better than others. In my experience this is the IDEAL TIME to use divergence indicators such as Momentum Divergence and/or MACD divergence as explained at my Webinars and in my Power Momentum Manual
9. The “moral of the story” is this: don’t jump on the bullish commodity bandwagon right now if you are not yet on board: WAIT for a significant sell-off to support which is overdue!