More precisely, that’s how the supply and demand dynamic unfolds for raw materials: escalator up! elevator down! and repeat… As we all know, price doesn’t move in a straight line.Ĭommodity rallies challenge that notion over shorter time frames yet give the impression of a yo-yo when zooming out on the charts. I expect many such interruptions during the cycle. Let’s call the recent correction a “commercial interruption.” Yes, the correction favoring stocks off the 2022 lows has been significant.īut it’s retreating from a logical confluence of potential resistance – a multi-year downtrend line and a key retracement level. It’s been commodities over stocks since crude traded below zero in the spring of 2020. Here’s the S&P 500 versus the CRB Index, a simple stocks/commodities ratio:
That doesn’t mean we should plug in, turn on and cop out. Nor will jeera futures have their turn in the limelight. Hollywood will not make a movie on crude oil trading below zero. Jim Cramer will not provide commentary on cotton, cattle, and/or the crack spread. From the Desk of Ian Culley commodity supercycle will not be televised.
