Will commodities outperform stocks in the coming years?

I just recorded a video that I encourage all of you to watch. The video presents evidence suggesting a probable long term shift into relative commodity outperformance over the coming 1-2 decades. This is not a weekly or monthly outlook for markets.

I strongly believe that this potential for a long termed shift in asset class rotation should be considered as you formulate trading decisions. Its a “see the forest through the trees” kind of thing.

BTW, in the video I refer to a research paper that Craig and I put together about a year ago. We presented some evidence for flatter stock market performance in the coming decade(s). That paper ties into the concepts presented in the video.  You can access that report here.

Here is the video:

Will Commodities Outperform Stocks In The Coming Years – ValueTrend

 

 

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4 Comments

  • Keith, not too long ago you were starting to look at oil and gas, (might have been on BNN) thinking that it could be close to an entry point for a trade. I’m looking at a very long term chart of Peyto and thinking that it might be forming a cup and handle … Any update on a two – six month outlook for oil, gas & Peyto would be appreciated .

    Reply
    • Brian–we have been picking small pieces of energy stocks up as they bounce off of support. As a rule, I do not address individual stocks for readers as I can’t spend my time on that. But, I have already been following PEY, so you’re lucky on this one in that I have some insights on it.
      PEY is interesting, we have it on our watch list. But as you note, it is stuck at the neckline. I’d like to see it break out before getting too excited, although I must confess that the stock looks intriguing now. The neckline seems to hang between about $10.50-then bouncing to $13 at this moment ($15 highs, but more near $13). Heck, a trade in that $10-$13 range (bottom to top) is not a bad if it does the bounce. If the stock makes it through $13, then its next target at recent highs near $15+, I’d say this has lots of potential. Lots of “ifs” there. For now, a trade with a stop loss to protect yourself could be considered. I have not entered it, but as noted, its on our watch list and I may buy…. We continue to leg into energy here and there– but not aggressively so I am patient.

      Reply
  • Good morning. Happy CPI day!!

    As always thanks for sharing the information you do, it’s greatly appreciated.

    Question – is a potential liquidity squeeze coming?
    I understand the basics but I’m not sure how to monitor the impact on the stock market from the government selling treasuries. Does some type of daily/weekly chart exist that indicates if the money is coming from the stock market, reverse repo, etc….?

    Thanks in advance…….Scott

    Reply
    • Scott the only thing I can suggest is watching moneyflow on the indices. For example, you could plot the SPX and then add Accumulation/Distribution line. That is one of my default indicators – it plots where the close was vs the high/low of the day, accounts for volume, and if it is above the half way point or below the half way point it cumulatively plots a point (positive or negative) for the day. Over time it shows money coming and going. Next, you can plot the Moneyflow index (MFI) which similarly looks at high low of the day, then uses an RSI type momentum calculation to plot a momentum study that will gyrate more than a cumulative line like the AD. You can read the descriptions of these indicators on stockcharts.com for a better description than mine – but essentially they do offer an ok indicator of money trends coming and going from markets

      Reply

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