First Gold, Silver, Maybe Sugar, And Now Soybeans?

By Mish Schneider of MarketGauge

Wednesday, October 23, 2024 5:44 PM EDT

If this is truly shaping up to be a time for commodities, especially ones undervalued, then let’s expand beyond gold and silver.

Don’t get me wrong.

I see more upside in both metals.

Remember my trifecta of inflation indicators?

Silver to gold-has to outperform-maybe starting
The Dollar breaks 100-not yet
Sugar-has to clear 22.50 cents a pound-almost

Add to that soybeans because often we have seen silver and soybeans rally together.

Here is sugar right now

I see a massive bull flag forming with a measured move slated for sugar to make a new 52-week high if the pennant of the flag breaks out to the upside or at around $.22.5 cents a pound.

Note how it is about to outperform SPY on the Leadership chart.

And by the way, gold, silver, sugar and now perhaps soybeans are all rallying with higher yields and a stronger dollar.

Imagine if that changes and yields drop while the dollar softens?

Looking at the soybeans chart:

The daily chart on soybeans looks like a double bottom from August and now October.

In fact, if the November futures contract can clear the 50-DMA (blue), it also confirms that a double bottom is in place.

Furthermore, the momentum indicator or Real Motion is flashing a bullish divergence as the red dots are approaching the 200-DMA while the price chart shows price far away from its 200-DMA.

Leadership is also interesting with Soybeans about to perform on par with the benchmark.

The warning I wrote about yesterday in junk bonds HYG, sent the market lower.

However, many other voices in the room feel the same as I do-commodities are the way to go as we end this year and into the next one.

ETF Summary

(Pivotal means short-term bullish above that level and bearish below)

S&P 500 (SPY) 575 support 585 resistance

Russell 2000 (IWM) 215 support 227 resistance

Dow (DIA) 420 support

Nasdaq (QQQ) 485 pivotal support 500 resistance

Regional banks (KRE) 60 pivotal

Semiconductors (SMH) 242 support 265 resistance

Transportation (IYT) 69.50 support