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The Commodities Bull Market - Where to Next ?

Commodities / CRB Index Sep 27, 2006 - 12:50 AM

The speculators long of the metals and energy are reeling from the sell off these past few months, where greed has been gradually replaced by FEAR ! Many now wonder whether the bull market has come to an end.

In my opinion the correction is a good thing, as the euphoria that gripped the markets going into May has by and large evaoporated, which is good from a technical viewpoint, as the further the sell off has gone on for and the longer it goes on for the more weak speculators are forced out of the bull market.

The point I would like to make is this, that the FUNDEMENTALS have NOT changed ! Therefore once the market forms a base the secular bull market is likely to resume and therefore corrections are to be taken as excellent buying opportunities !

Whilst the fundamentals remain of ever growing demand and declining stocks of commodities it is only a question of time before the bull market in commodities resumes !

When will the bull resume ?
Without goign into full Technical Analysis mode, the chart suggests the market is now getting to an oversold state with strong support in the 285 to 295 range, hence the CRB 'should' make a base in that area.

How can I benefit from the resumption of the commodities bull market ?
Now for ordinary investors the best way into the commodities bull market is via commodity stocks such as BHP Billinton and oil companies such as Shell which are continuing to make vast profits on the back of high commodity prices, year in year out ! Alternatively the risk can be spread by investing in unit or investment trusts such as Merryl Lynches Natural Resources fund.

Nadeem Walayat

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Comments

09 Oct 06, 18:25

Re: The Commodities Bull Market - Where to Next ?

Excellant work Nadeem, I am definetly now going to take a look at opening a spreadbet on the CRB index ! :)

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