Sunday, March 11, 2018

Is It The Best Time For Commodity Investing?

In the long-term investing one has to keep in mind a typical sequence:

During economic expansion the first asset class to top are treasuries. Then the stocks are topping and, finally, commodities.

Look at the chart below:


source: Stockcharts.com

The chart shows this rule in practise. If I am correct, treasuries had topped in 2016 (blue circle). The stocks are probably topping now (the green circle), even  despite the latest all-time high made by Nasdaq 100.

Finally, commodities, represented by the CRB index (unfortunately this index is overweighted by oil), are breaking above the long-term resistance level at 195 (the red circle).

Summarizing - if I am correct, now there is time for commodity investing...

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