Commodities-Stock Buying Op

Commodities stocks have two primary drivers, commodities prices and the general stock markets. When both are doing well, commodities stocks thrive. But when both are weak, commodities stocks amplify their losses as we’ve seen during the sharp universal correction since late April. The resulting deeply-oversold commodities stocks have created an outstanding buying opportunity today.

In order to understand why commodities stocks have been beaten down to such great bargains, we have to explore the technicals of their primary drivers. Commodities prices are best quantified through the Continuous Commodity Index (CCI). It is the traditional old-school equally-weighted geometrically-averaged CRB index. Today’s version of the “CRB”, created in July 2005, is dominated by crude oil and uses a brand-new methodology not comparable to the decades of classic CRB history. (more)