On May 3rd 2019, we put a recommendation to BUY soft commodities, arguing that a new commodity cycle was about to start and would last for some time. See BUY SOFT COMMODITIES. At the time we invested in soft commodities in our MODEL PORTFOLIO
On April 24th 2021, we recommended to SELL the same and take profits as the moves had become unsustainable and a bubble was developing in that sphere. We started shorting Copper, Oil, Soybeans, Corn and Lumber in our MODEL PORTFOLIO. See SELL SOFT COMMODITIES.
Parabolic overshooting in commodities
In our strategy papers in recent months, we argued, that we could see a massive overshooting in the underlying reflation cycle into Q2 2021 before our suggested Q2 global correction.
From late March we saw a broad based rally in commodities, which even surprised us when we it comes to the magnitude and parabolic overshooting in lumber and in soft commodities, where corn, soybeans and wheat have been going vertical.
From a technical perspective, a parabolic blow off represents the ultimate endgame of a rally/bull cycle, and a major top is no longer a question of weeks, but a question of days.
We started shorting Soft commodities at the beginning of May and are now going truly short as after last Friday and Monday overshooting, we have now important reversals.
The likelihood of a sharp V-Shape reversal this week is important, particularly as China amounted to day atet it would take measure to stop sepeculation in the commodity sphere.
The impact of the commodities rally is already visible in the US inflation numbers that were published today, and commodity inflation is a real threat to the real economies, be it in China or in the USA.
We are very near a major reversal that could be the beginning of a significant correction in commodities into the beginning of the summer.
Today, we added to our shorts in Copper, Soybean and Corn in our MODEL PORTFOLIO.
We publish below the charts of the commodities for the record
Sell LUMBER @ USD 1630
SELL SOYBEANS @ 1637
SELL CORN @ 767
SELL COPPER @ 480
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