It is getting serious. Commodities are breaking down. Note that there is always (!) a possibility of a false breakdown, but this setup in commodities really does not look very constructive.
Very recently we noted a relief rally in commodities as the U.S. dollar was breaking down. That was more of a short term view.
The longer term view we hold for many months now was outlined in a piece written almost three months ago: Time To Invest In Commodities In 2017 And 2018?
In it, we looked at the same chart embedded below, only to conclude that there really is nothing bullish on the commodities chart.
We also looked from another viewpoint: our proprietary market barometer. It suggested that long term trends of leading commodities are neutral. Other leading markets are also neutral which suggested to us that there was no solid ground for a raging commodities bull.
We wrote that it suggests that in 2017 and presumably 2018 choosing very specific commodities which outperform their peers will be the way to invest in the commodities space.
This is what we concluded 3 months ago, after thorough analysis of commodities:
InvestingHaven forecasts that investing in commodities in 2017 and 2018 will give moderate results, and being selective will be a key success factor.
The most up-to-date commodities chart simply confirms the viewpoint from 3 months ago. Worse, commodities are breaking down now, on their weekly chart (5 years), which is certainly a significant event.
Investors better pay very close attention as this setup looks nasty.
In closing, we refer to the 5 Must-See Commodities Charts we created early this year. The 5 charts of crude oil, gold, silver and base metals are the same as back then. Only uranium looked bullish then and has now retraced, it has a neutral view at this point.
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