Panic In Commodities

Everyone is running for the exits today in commodities.  Agricultural commodities are down around 3-4% today.  Oil is down to $129, or $5 per barrel.  Then, gold which was up huge is now approaching $950 an ounce.  This is pulling down coal, steel, agribusiness, drillers, etc.  Did the world stop growing in one day?  This is profit taking.  Everybody has been waiting to see who flinched first.  Once it fell two days in a row, profit takers ran with it. 

I’ve said it before and I’ll say it again.  Let’s look at what’s leading today:  financials and anything that’s been beaten down.  So, we’re once again seeing a rotation, not new money.  We’re only seeing a 70% up day.  Just like yesterday.  I’d love to believe this is the beginning of something big.  But, I just can’t.  Yes. I’ve covered some shorts and I’m enjoying seeing some green on the screen, but I’m skeptical.

I’d be careful and not make too many big moves in here.  The chances of whipsaw are extremely high.  I think we’ve got more upside but be careful


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July 2008
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