Over the past month Biotechs have proven to be most resilient amongst battered asset classes. The one respite previous to June was in commodities. The great commodity super cycle was going to ruin us all, until it collapsed too. And now we have a situation whereby people are TRAPPED due to their beliefs in an asset class best reflecting depression.
Admittedly, I did not think it would happen so fast. Alas, but here we are.
With Natty down more than 12% today and oil -2.6% — this sector is getting lit up again.
Copper, Aluminum and oils are all in a bear market now, off by 20% or more. According to the Stocklabs seasonality engine — this is standard stuff. This sector does poorly after May and doesn’t come back until November.
Barring a miraculous rally in stocks, we might soon find ourselves without any venue to park cash other than cash or short stocks. The reduction of commodity prices is GOOD. Over the past month natty is -34%, wheat -21%, nickel -19%, cotton -18%, uranium -16%, copper -14%, timber -13%, corn -13%, and cocoa -7%.
This bodes well for the plebs. But it doesn’t mean the economy is coming back right away and it doesn’t mean stocks can now head higher — since the Fed is likely to continue to raise rates to ensure inflation is dead for sure.If you enjoy the content at iBankCoin, please follow us on Twitter