Greg Guenthner coming to you from Baltimore, MD... It's Friday the 13th. Scared? You should be. If you've invested in commodities, that is…
We're knee-deep in yet another commodity crisis this month. That means more lows, more bearish headlines – and more ways for you to make money as they fall off the cliff. You'll see what I mean in a just a second...
And no, I'm not just talking about oil. The commodity slump is rippling through the entire market. As I've explained for months, I believe we're seeing the end of the commodity "super cycle" that began about 15 years ago. Today we're going to take a closer look at some of these busted trends. Avoid these areas of the market at all costs—if you want to keep the shirt on your back. But before we get to the charts let's take a trip down memory lane to the lost decade and the great commodity boom. It always helps to find a little perspective as the hammer drops… Take copper. The industrial metal exploded more than 620% from 2001 to 2011, topping out near $4.50. Then it fell through the floor… "Copper's already below $3, and the breakdown we're seeing now could easily send copper prices to $2 or lower over the next couple of years," I wrote nearly a year ago. "I can already hear the fat lady warming up." Now the fat lady's getting ready to wrap up her act. Just look at copper today… Clocking in with a spot price of $2.16 last night, copper just posted new 6-year lows. Every rally since 2011 has ended in failure for the base metal… Copper has some company. In fact, there's an entire parade of metals and energy plays leaping off the side of Commodity Mountain like a herd of lemmings. Oil is quickly slipping toward its August lows. About six weeks ago I guessed we could see $60 oil by the end of the year. Note to self—give yourself a sharp rap on the knuckles because that ain't happening. September's crude rally is crushed. See for yourself: This morning, crude is barely back above $42. That ain't gonna cut it. Looks like "lower for longer" continues to be oil's mantra as we march toward 2016… And let's not forget our good buddy gold. Gold has had a rough road to hoe since sneaking toward $1,200 back in late summer. "Yes, gold has posted an impressive rally since early August. And recent weakness in the U.S. dollar over the summer has helped add fuel to the fire. But as I mentioned before, we need to look at this rally through a long-term lens," I told you late last month. "And what you'll quickly notice is that what gold is experiencing so far is a bear market rally." Sure enough, gold turned tail and ran shortly after its October attempt at $1,200… Right now, gold is back near its August lows. Barring an oversold bounce, gold could easily lose support here and sink to prices not seen since late 2009. Your best course of action right now is to steer clear of these troubled commodities. More pain and suffering could be on the way… Sincerely, Greg Guenthner [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner] |
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