Sell Grains, Buy Copper

Capturing a commodities crash July 17, 2014     Sell Grains, Buy Copper   Capturing a commodities crash Buying the base-metal boom Plus: When can we expect a biotech bounce?   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner The market's crashing... No, I'm not talking about stocks (although S&P futures are down about 8 points as I type). While the stock market has captured everyone's attention lately-- from the Fed chair to the doomsday top-callers--you'll find the real action is happening next door in the commodities markets. Have you checked out the price of grains lately? Go ahead and pick one. I'll wait. Whatever you're watching--wheat, corn, soybeans-- is down double-digits over the past few months. You might recall that I was bullish on corn earlier this year. Well, that uptrend corn was building back in the winter turned into a disaster in the spring (don't worry, we got off the corn bandwagon back in mid-May). Over the past three months, corn has dropped more than 20%. There are plenty of reasons why corn and other grains are tanking. The Department of Agriculture just projected that supplies will significantly exceed expectations this year. Yes, the summer weather has been quite favorable to U.S. crops... "Crops in the United States, the world's top grain exporter, have flourished this summer thanks to nearly ideal weather, fuelling expectations that bumper autumn harvests will expand crop inventories," Reuters reports. "Reduced demand for animal feed helped lift grain inventories, which have been replenished following a historic U.S. drought in 2012." With billions of buschels expected later this year, corn and other grains aren't offering much on the long side. Avoid them. On the other hand, not all commodities are feeling the pain. Just check out some precious (and not-so-precious) metals. Palladium continues to push to new highs. It's up more than 22% year-to-date. Then there's copper... A couple of weeks ago, I highlighted a huge buy signal in Dr. Copper. Sure, copper had its share of trouble in the past. The metal has slowly trended lower since it peaked near $4.50 in 2011. But the action we saw earlier this month was telling. Copper finally cleared critical resistance, breaking the downtrend that had trapped the industrial metal for nearly three years. Now's it's working on higher prices: I like copper here as it consolidates its big move higher from last month. This could be the perfect addition to your portfolio as you wait out potential seasonal weakness in the stock market...         What NEVER to Buy at the Grocery Store Unless you buy organic, there's a 99% chance this particular food is contaminated with pesticides… toxins that have been linked to birth defects, nerve damage, cancer, Parkinson's disease, autism, and diabetes. You probably have this popular "healthy" food in your fridge right now. So before you take the next bite, I urge you to click here to learn all the details.           Rude Numbers Targets, Predictions and Wild Guesses   18,000 workers at Microsoft will soon lose their jobs. The company says the layoffs are part of its attempt to streamline its Nokia acquisition... 36.5% of all automobiles sold in the U.S. through May have been SUVs. This marks the first time in history SUV sales have outnumbered sedan sales in the U.S. $103 buys a barrel of crude today. Oil appears to be back in play after the U.S. hit Russia with a round of sanctions... $1,306 is where you'll find gold futures today. The yellow metal is up about $6 in early trading. Meanwhile... 1,967 marks the spot for S&P futures just before the bell. Stocks are looking to open in the red as we approach the end of the trading week...     Rude Trends When to Buy... When to Sell   "I am just wondering if you think that the SPDR S&P Biotech Index ETF (NYSE:XBI) has farther to fall," writes a curious reader. "Or if it might be tradable on the upside here?" This is a tricky one... On one hand, I kinda like how Yellen said biotechs are overvalued. To me, this is a great contrarian indicator. In theory, at least... But I really don't like the action in XBI or any of the big biotech ETFs over the past couple of weeks. Big volume is coming in on the down days. And since July 1, XBI is off by nearly 10%. I don't think it's a great idea to try and catch this falling knife. At least not yet. If XBI does bounce soon, I'm thinking it tries to edge higher near $135 or $130. That doesn't mean you should try to buy at these prices. Instead, you should be looking for clues. The biggest mistake you can make here is anticipating a bounce instead of reacting to one. If you see XBI approaching a support area, wait for it to go green before taking a shot at it. Since the beginning of the month, the bears have been in control. Until there's evidence that things are changing in favor of the bulls, we have to assume that XBI is headed for lower prices... [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]     Ignore At Your Own Peril Today's Must Read Links   The 2 Most Lucrative Words on Wall Street [time sensitive] Oil-Industry Veteran Reveals 6 Plays to Get Rich Fast Just one nine-digit code could speed up your retirement plans by 20 years!     BE SURE TO ADD dr@dailyreckoning.com to your address book.       Additional Articles & Commentary: Join the conversation! Follow us on social media:         The Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Agora Financial delivering daily email issues and advertisements. 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