ETF Focus: Commodities

Let’s look at a few commodity ETFs together. In general, they have remained in an uptrend for two years. This channel needs to break in order for commodities to start a downtrend, which is going to require oil to lead the way (which it hasn’t).

Precious metals miners have been on a tear for a few weeks, but the easy part of the ascent is over.

What will dictate this, of course, is what gold itself does. I have been surprised how strong gold has been ever since it (barely) broken its ascending trendline, but as with the miners, the easy part of the push higher has been complete, and now there’s way more overhead supply. The dollar has massively overbought, but a collapse in the DXY recently is what compelled gold prices higher.

The argument for the cessation of the precious metals ascent is strengthened by silver, which is facing two major barriers in the form of a long-term broken trendline and a large right triangle top.

As for energy, this beast is unstoppable. If you were at the Biden inauguration and were asked what the strongest equity sector would be, I doubt you would have answered the oil companies, but they have been absolutely thriving in this supposedly left-wing political environment. Incredibly, XLE was at never-before-seen highs on Friday.

More By This Author:

ETF Focus: Foreign
ETF Focus: Sectors
Mouse Trap
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