This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Raw Commodities Show Signs of Bottoming

A scan of the daily price charts for several raw commodity markets (grains, cotton, gold, livestock, sugar and natural gas) shows that fledgling uptrends are occurring, or at least those markets have rebounded well up from their recent lows.

While the raw commodity bulls have more work to do to make a convincing case that the sector is in a fresh bull run, the rebounds in market price are a significant early clue that the entire raw commodity sector has hit or is close to a major bottom.

There still may be some rocky times ahead for the major commodity-consuming world economies -- they must endure the European Union sovereign debt and financial crisis that continues to play out. However, markets tend to factor in expected events well before they actually occur. In other words, recent price action in the commodity markets suggests that the market senses that the worst of the E.U. debt crisis and world economic stagnation is behind us and that better times are in the not-too-distant future.

Now is the time for commercial end-users of raw commodities to consider locking in prices for as far out into the future as possible. In the opinion of this veteran commodity market watcher, most raw commodity market prices have bottomed out or are close to doing so.

Importantly, any experienced commodity hedger in any major commodity market will also profess that trying to correctly time and pick precise market bottoms (or tops) is a futile endeavor. It's generally agreed that a commodity market hedger who can get a price locked in at the lower one-third of its recent historical trading range for buyers, or the top one-third of that range for sellers, is a good move.

And if the notion that the raw commodity sector is close to bottoming is way off the mark and if commodity market prices in general still have significantly farther to fall, this would suggest that the world's major economies have slipped back into recession and that a prolonged period of world economic stagnation is possible.

Jim Wyckoff is president of JimWyckoff.com, a trading advisory and trading education service.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
DOW 17,042.90 -28.32 -0.17%
S&P 500 1,972.29 -5.51 -0.28%
NASDAQ 4,493.39 -12.4620 -0.28%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs