The Commodity Trifecta: Gold Provided us a Fair Warning

Stop talking about oil Jason!

I'll be straightforward, as always—I don't have much new to share at the moment. We're at that phase where, while there may not be fresh trades every day, our positions are well-aligned to capture the trends we're in. The missing piece is energy, and we've got that covered. In the long-term portfolio, we're holding XLE, and about a month ago, we got a bottoming signal in gasoline, followed by a similar signal in heating oil last week. Natural gas is a long position in the futures portfolio.

Above are the current positions in the Reversal Portfolio. (For context, we manage three portfolios: Reversal, Futures, and Long-Term ETF, which is available to paid subscribers.) Recently, we also went long on the rest of the agricultural complex, adding more positions.

It’s time to let the winners run! This is how money is made.

"It never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!" - Jesse Livermore

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Now let’s focus on what’s next!

Three key factors are currently driving commodity markets higher: the war in the Middle East, a shipping strike, and recent hurricane activity. These events are creating widespread impacts across various commodities, from grains to oil.

While energy remains the primary sector we're closely watching, the broader market is showing signs of a shift. I’ve emphasized the importance of one particular chart that helps gauge the movement of commodities and bonds—the CRB/USB ratio. Long-term, this chart suggests commodities are emerging from a prolonged downtrend and are poised for upward momentum.

You've seen this before, but it’s been a while since we looked at the short-term view. The range remains tight, with levels holding steady since 2022.

While neither bonds nor commodities have significantly outperformed recently, commodities have managed to maintain their primary trend.

The bottom indicator shown is a long-term stochastic on a weekly chart. When these signals appear, they typically precede rallies in the commodity market.

This one comes right on time, coinciding with the trifecta of hurricanes, geopolitical tensions, and shipping strikes. (Though, as we explained in The Commodity Report yesterday, the shipping strike isn't expected to impact oil prices.)

Kevin as always knocked out some knowledge quickly in the first 20 minutes. Sam dropped some amazing charts and trade levels to look out for. Kashyap went deep in to information that we need to hear as traders. This is The Commodity Report and it is what Kevin Green and I had in mind when we started these.