Connect with us

Hi, what are you looking for?


Which Way Is Up?

Wow, the selling continues. As the market absorbs the daily news of inflation, the market is a hard place to find ballast right now. I was on a presentation platform this week, and the person following my presentation was making 5 digits per month shorting stocks. The presentation went on to say that this will continue for a long time.

As the market tests the June lows, we’ll need to watch for the selling to expand.

I see critical shortages in energy and copper ahead, but that is further out than the front of our shoes so it is not soil we are walking on now.

For now, energy has a couple of big things going on:

1) A double top in Natural Gas for now:

2: A double top in oil occurred a while ago. With Friday’s price action we are getting close to unchanged on the year.

Oil and Natural gas make up a significant part of the $CRB index and it is cracking. The two year uptrend is cracking but other commodities are also getting wiped by the high USD and some government influenced buying/selling.

There is a lot of price action focused around the SPR supplying product into the market. As the drain of the Strategic Petroleum Reserve continues, we do not appear to be running on empty at any time soon. Chart below from the EIA. We appear to have used up about 1/3 of the maximum inventory back in 2010, and still have 2/3 in the system. However, the recent drop in inventories looks out of scale for the chart. Will that stop anytime soon or continue?

When will production catch up with demand, so that SPR withdrawals are not necessary? That still looks to be a distance away, and as oil prices come down, that stops capital being allocated. Oil is the hardest trade on the planet as it is a political football in every region. Trying to get the direction right is difficult. When will the Saudi’s cut production? Will the Russian barrels coming off the market be the force that changes the charts? Neither one of these has been a reason for the markets to rally yet. 

The charts outline some serious pressure on the commodities. As for the question in the title, Which Way Is Up? Well, it’s not ‘up’ towards commodities right now.

You May Also Like


What price happiness? The answer might be £3,360 a year, as the average UK worker would take a 10.5% pay cut to work for...


After taking a breather in the week before this one, the Indian equity markets resumed their up move. The headline index continued with its...


Small businesses are bringing forward their finance applications in order to beat expected further interest rate rises, according to new research. Four-in-ten (44%) SME...


The bears have been in charge of the market for months now, going back to the beginning of January when the S&P topped out...

Dislaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2023 | All Rights Reserved