But even with that punch to the gut, we’re not backing down from our bigger-picture thesis.
We still believe commodities - as a group - are on the verge of entering a brand-new primary uptrend.
The weight of the evidence is building, not just in Copper or Tin, but across Energy, Softs, and multi-commodity indexes.
The breadth is beginning to improve, momentum is turning up, and key levels are getting tested - or already breaking out.
So yeah, the road will be bumpy. But this is what early-stage bull markets look like.
The monthly PPO is turning the corner
This is what the long-term momentum at the index level looks like.
The Invesco DB Commodity Index $DBC has been trapped in a falling wedge since 2022, but it's beginning to resolve higher.
In addition, the monthly PPO is curling higher from near-zero levels - just like it did back in 2020, before commodities kicked off their biggest rally in years.
We’re not calling for liftoff yet, but we are leaning into the idea that the next big move for the asset class is higher.
Let’s stay open to it.
There's still a heavy dose of bearish trends
We’re still stuck in a bearish regime.
Nearly half of the futures contracts we track are showing bearish short, intermediate, and long-term trends. That’s not what a bull market looks like...
This is what breadth looks like before major trend reversals. The charts don't look good until they do.
And for the asset class as a whole, it’s starting to look better.
New highs and lows are a mixed bag
This is not exactly a table of strength.
Only 12% of the contracts on our watchlist are trading at new 4-week highs, while a hefty 45% made new 4-week lows. Natural Gas, Copper, Silver, and a whole bunch of Ags are still getting hit.
But context matters.
The energy contracts, especially Crude, RBOB, and Heating Oil, are all holding well above their recent lows and remain within striking distance of multi-month highs.
We’re seeing a similar setup in Cocoa, Iron Ore, and even Cattle.
The path of least resistance for many contracts is shifting higher, and we'll be here outlining the best setups for you.
Commercial hedgers flipped net-short Palladium after years of carrying their largest net-long position ever. We have been anticipating this as a bullish catalyst for the commodity.
Commercials added nearly 12,000 contracts to their largest net-long Soybean Meal position ever.
Commercial hedgers dumped over 700 contracts from their record net-long Bitcoin position.
