Commodities on the Upswing

Commodities are starting to come back strong. We talked about the strength in the commodity-related stocks on Monday, and perhaps it is appropriate that we talk about the commodity market as an asset class.

It looks to us like the primary long-term bull market for commodities is getting back on track, and we could be looking at another leg to the upside for hard assets. The driver behind this renewed strength has to be strong global growth. Outside of the self-inflicted financial crisis that we're currently suffering through (along with the collateral damage that was thrown Europe's way), the rest of the global economy is doing just fine.

China isn't missing a beat and continues to consume at a voracious pace. The Baltic Dry index continues to surge higher as shipping rates to Asia for bulk commodities, such as iron ore, continue to rise. This is not a sign of weakness, and the ground work is being laid for a resumption of the bull market in commodities. Oil is the most important commodity, and it pushed out to new highs north of the $80 mark Tuesday.

United States Oil ETF

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