Are commodities suggesting a lack of demand is in play on a global basis? It’s possible. Could this impact stocks? So far it has not.
The chart looks at the Thompson/Reuters Commodities Index over the past 30-years. This index has created a series of lower highs since it peaked back in 2011.
The index has found line (1) to be support and resistance (highs and lows) several times over the past 13 years.
This index kissed the underside of 800-pound dual resistance two months ago at (2) and selling pressure drove it quickly lower last month.
As this time this phrase comes to mind; “It doesn’t matter until it matters!”
History would suggest that in time, commodities weakness will send a caution message to stocks. We will see if it’s different this time!
As Commodities Turn Weak, Will Stocks Follow?
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