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What Commodity Momentum Tells Us About Equities

Posted on 08 May 2015

It is fact that equity prices prosper when commodity prices are relatively stable. Normally, it is the instability of commodities on the upside that disturbs equities, such as that experienced between 1973 and 1974. However, downside volatility in the commodity pits can be even more devastating. Just consider the sharp drop in both markets in the second half of 2008, 1921 or even the 1930/32 experience.
That said, we can use long-term trends in commodity momentum to signal favorable long-term environments for equities. This chart, for instance, features our secular commodity momentum indicator. It is calculated by dividing a 60-month by a 360-month MA of commodity prices………………………………………..Full Article: Source


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VRS - who has written 48800 posts on Opalesque Commodities Briefing.


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