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Commodities correction underway
Wednesday, March 19, 2008
Twitchy traders may now be handing commodity investors a gift. Since last August, the venerable CRB Commodites Index has bounced sharply whenever it has come close to its 50-day moving average - based on the chart below, that could happen today or tomorrow.
Why would this time be any different?
Aside from, perhaps, a general realization that prices have come very far, very fast, what has really changed in the last couple of days in the world of hard assets?
Did I miss the news that we are now "out of the woods" with that whole pesky "credit crisis" that began last summer?
Did my wife and I miss the housing market bottom?
Damn!
To learn more about investing in natural resources using commonly traded ETFs, stocks, and mutual funds, see this description at Iacono Research. Or, sign up for a free trial.
7 comments:
Housing bottom?
No Tim, you didn't miss it. You have plenty of time to short the market before the housing bottom in 2013.
At some point, people will realize that the rest of the world is f'ed too and the dollar will stop sinking. When this happens, commodities are due for a serious correction. I don't know if this is happening now or if it will happen later, but it looks unavoidable to me. Commodities are looking really risky to me at these levels and some seriously good timing is going to be needed to avoid getting burned.
Guess the midyear price of gold and oil:
Gold: $1263
Oil: $121
extra credit for posting early??
Commodities correction now complete
The Guess the Mid-year price of oil and gold contest will kick off in another couple week or so - should be interesting.
Now there are rumblings that some are trying to get out of or modify the BSC bailout deal. Rich on so mnay levels. Perhaps Bernanke and the FED can print some shirts that state:
"I Tried to Save Bear Stearns and All I Got Was This Lousy T-Shirt!"
Ignore moral hazards at your own risk, especially when Wall Street is involved.
SW,
I agree that the whole world is indeed probably "f'ed". I suggest one reason could be that most nations are printing (so-to-speak) too much money.
As a store of value they are probably all going to be found lacking, it's just the dollar will be likely be found more lacking because of it's relatively high supply to even the others in the printing-press-philic crowd.
In any event, could it not be the case that gold will still go up, or at least be sustained, in real terms?
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