I know they say commodity markets usually go through a 20 year bull run, but we also know that corrections do occur in bull markets and that I think sooner than later a correction is coming for the commodities, last night on Mad Money Jim Cramer mentioned, $16 wheat, $16 corn, 16 NG, 1600 GOLD. I agreed with some of it, then I thought, wow this reminds me of nearly all the past bubbles we have been through. I think a steep correction in the commodities soon, could keep the commodity bull market intact. There is a global slowdown in the making and a recession in the US has already begun which makes it hard to believe that the commodities can continue the run they have had, I know other countries are still experiencing growth, but with the US in a recession this could and will probably hurt the global economy. Commodities are ready for a correction.....
i think we'll see profit taking before the fed cuts rates. then after the fed cuts big commodities take a big run north before another correction comes. imo oil will be closer to 80 than 120 by year end unless there are major supply shocks. metals and grains could see much higher prices. there's still a ton of liquidity being pumped into the system and demand/supply for a lot of commodities are pointing up. add in real negative interest rates and the only logical place for all that excess liquidity will be commodities.
well, if Cramer says 1600 gold, then it has to be near a top now! I've never seen anyone who is wrong more than this guy. Well, maybe Kudlow.
Did he really say that? Those are all HUGE premiums over where we are right now. Like 70-80% above where we are right now after a giant run up. What was his reasoning behind those claims?
My suspicion is that as equities/munis/whatever continue to plunge, latecomer managed money is going to start going into commodities, only to find out how small and illiquid some of these markets are. Hence the limit up moves and explosions in thinly traded metals. However, these markets tend to move quickly down too, as profit takers will find out. Probably still some room up to go - however, note the SEC filing for DBA where due to position limits, they have needed to use other derivatives to fulfill the contract. This introduces tracking error, etc... and who know what else. Fun stuff, huh?
this commodity bubble will pop the question is when. I think commodities are where real esate was 2 1/2 years ago.where tech stocks were in early 2000. where is all that money going to go when it comes out of commodities?back into stocks, which means much higher prices are in store.