3/5/2016
The end of collapsing commodities prices, that is. It is too early to declare a full turnaround, but over the past six weeks, the prices of oil, copper, and precious metals have rebounded. Oil is appearing to begin a turn just like it did after the price collapse of 1999, quickly up over 20% from recent lows. Gasoline took a hard dip well below $2/gallon (at least here in the midwest) which lasted for a few weeks. It has since turned north again, looking up closely at that $2 level. Gold is up $200 from its recent lows, and copper is up about 10%. Until these trends are confirmed by price action over the next 3-4 months, it is only educated speculation on our part that the corner has been turned. However, we have been bottom-fishing for low-cost ways to participate in the recovery of these commodities should they materialize. Our personal favorite approach is to use a few long-expiration LEAP options (Jan 2018 expirations) on some of the stocks and ETFs representing oil and metal plays. We’ll continue to look for signs confirming (or denying!) this trend, and provide details on our subscriber page tab above: “Current AP Indicator Status”.
