Colossal Close for Commodities – May 7th, 2021

The S&P 500 made a higher close this week. The Dow was the best performer with the Nasdaq underperforming again. Markets still look pretty bullish. Once again, the breadth on the normal indicators continues to signal ok. The SSI indicators are still a little weak as the faster indicators are at 50% or less. The Nasdaq probably needs to join the party to turn these up.

It’s all about the commodities right now. Launch parties going off every day. Stuff like CNQ, a big oil producer breaking out to all-time highs while oil is still 60% off the highs of 2008. Oily names like DVN making new 52-week highs, XOM, COP, CVX all popping out of bull flags. Canadian names like ATH.TO at three-year highs. I own some of the oil companies mentioned. Mining charts are popping like popcorn at a movie theatre. Gold miners are the same. Uranium names are flying this week. Financials also had a strong week. JPM closing at new all-time highs on a breakout. Transports and industrials also surged. Tech and semiconductors are still weak.

The vicious swing in commodities all rotated higher on the back of the US dollar breaking below the 2021 uptrend. A big outside bar pointing lower hit the dollar chart and sent commodities flying higher.

I remain concerned about the Nasdaq weakness, but at this point it just seems a strong rotation rather than outright selling. However, it seems that investors staying on the tech side continue to have to wait for the tech names to start to turn up .

Summary: A vast number of raw commodity charts are already running up near all-time highs. Copper exploded to new all-time highs. The commodity currencies like Canada and CEW ETF, freight indexes and other commodities are confirming Copper’s run. The steel ETF at 10-year highs, etc. But the oils are just bouncing off of losses of 90% from the 2014 highs. It looks like massive upside available there if they break the 7-year downtrend.

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