Are Commodities Turning Bearish?

Many traders are in a tizzy because the Reuters-Jeffries CRB Index – a broad measure of commodity prices – has broken an uptrend line. A downturn in commodity prices would foreshadow a recession. Let’s see what the fuss is about…

That uptrend IS broken. But remember that while an uptrend line has broken, a new downtrend hasn’t started. The CRB could move sideways as it digests its gains, then take off higher again. Keep your eyes on 316 and 310 – two strong levels of support for the CRB.

When the broad commodity sector is moving sideways, some things go up and some go down, right? Well, gold and silver are both showing tremendous strength. Copper isn't doing badly, either. And uranium isn't slowing down for anything. I've just described 3/4ths of the stocks in the Red-Hot Canadian Small Caps and Red-Hot Asian Tigers portfolios. In other words, friends, you're in fine shape.

Check out my new gold and energy blog at MoneyAndMarkets.com