The speculators long of the metals and energy are reeling from the sell off these past few months, where greed has been gradually replaced by FEAR ! Many now wonder whether the bull market has come to an end.

The Commodities Bull Market - Where to Next ?

In my opinion the correction is a good thing, as the euphoria that gripped the markets going into May has by and large evaoporated, which is good from a technical viewpoint, as the further the sell off has gone on for and the longer it goes on for the more weak speculators are forced out of the bull market.

The point I would like to make is this, that the FUNDEMENTALS have NOT changed ! Therefore once the market forms a base the secular bull market is likely to resume and therefore corrections are to be taken as excellent buying opportunities !

Whilst the fundamentals remain of ever growing demand and declining stocks of commodities it is only a question of time before the bull market in commodities resumes !

When will the bull resume ?
Without goign into full Technical Analysis mode, the chart suggests the market is now getting to an oversold state with strong support in the 285 to 295 range, hence the CRB 'should' make a base in that area.

How can I benefit from the resumption of the commodities bull market ?
Now for ordinary investors the best way into the commodities bull market is via commodity stocks such as BHP Billinton and oil companies such as Shell which are continuing to make vast profits on the back of high commodity prices, year in year out ! Alternatively the risk can be spread by investing in unit or investment trusts such as Merryl Lynches Natural Resources fund.

Nadeem Walayat

(c) MarketOracle.co.uk 2005-2006

Disclaimer - This Analysis / Forecast / Trade Scenerio is provided for general information purposes only and not a solicitation or recommendation to enter into any market position, and you are reminded to seek independent professional advice before entering into any investments or trading positions.
The Market Oracle is a FREE Financial Markets Forecasting & Analysis online publication. We aim to cut through the noise cluttering traditional sources of market analysis and get to the key points of where the markets are at and where they are expected to move to next ! http://www.marketoracle.co.uk

This article maybe reproduced if reprinted in its entirety with links to http://www.marketoracle.co.uk

Comments

09 Oct 06, 18:25

Re: The Commodities Bull Market - Where to Next ?

Excellant work Nadeem, I am definetly now going to take a look at opening a spreadbet on the CRB index ! :)

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.