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A New Bull Market Is Just Getting Started

By Jeff Clark
Thursday, April 2, 2009

Commodities are ready to explode higher.
 
In the commodity sector, you don't get a more bullish sign than when the 20-day moving average crosses over the 50-day moving average. (And there isn't a more bearish sign than when the cross goes the other way.)
 
Take a look at this chart of the Commodities Index (CRB)...
 
 
The 20-day moving average crossed over the 50-day moving average back in September 2007. That kicked off a strong bull market in commodity prices, and the index rallied from about 325 all the way up to 475 – a gain of 46% – in just 10 months.
 
In July 2008, the 20-day moving average crossed under the 50-day moving average. The bear market that followed cut the index by more than half and inflicted severe pain on anyone invested in the sector.
 
But now the bull has returned. We got a bullish crossover on the chart last week, and that should lead to higher prices for commodities over the next several months.
 
There's no guarantee, of course. The CRB index could just waffle back and forth right here and hammer out a more complex bottom. But given the severity of the recent decline and the overwhelmingly pessimistic investor sentiment, it seems more likely we'll kick off this up-leg with a sudden, strong rally.
 
Crude oil, heating oil, and natural gas combine to make up about 18% of the CRB Index. Gold, silver, and platinum make up another 18%. Anyone looking to get on board the commodity rally should look to buy stocks with exposure to these sectors.
 
Best regards and good trading,
 
Jeff Clark




In The Daily Crux Recent Articles
Market Notes
Chemical giant Rohm & Haas hits all-time high.
 
Natural gas plunging on fear of oversupply... U.S. Natural Gas ETF down 41% this year.
 
Oil follows suit... down 4% to below $48 a barrel.
 
Earnings today... CarMax, Monsanto, Research In Motion, Rite Aid.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1221.53 +1.3% +10.1%
Oil 37.77 +1.5% -2.8%
Gold 135.20 -0.1% +13.4%
Silver 27.93 +0.4% +47.9%
US-Dollar 80.67 -0.8% +8.1%
Euro 1.32 +0.6% -12.1%
Volatility 19.39 -9.2% -8.2%
Gold Stocks 564.53 +1.3% +10.6%
10-Year Yield 3.00 +1.4% -9.6%

World ETFs
Symbol Price
Change
52-Wk
USA 122.56 +1.3% +10.2%
Canada 30.44 +1.3% +13.8%
Russia 21.63 +2.3% +16.7%
India 37.73 +1.9% +20.0%
Israel 16.47 +0.9% +9.7%
Japan 10.58 +1.0% +7.4%
Singapore 13.88 +1.0% +19.2%
Taiwan 14.72 +1.6% +17.8%
S. Korea 56.56 +1.7% +22.8%
S. Africa 70.85 +3.9% +22.9%
China 45.06 +1.4% +0.1%
Lat.America 52.82 +1.4% +6.7%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 136.18 +1.5% +14.8%
Big Pharma 64.13 +0.6% -3.3%
Internet 72.13 +0.7% +22.3%
Semis 16.03 +2.1% +28.9%
Utilities 31.21 +0.3% +1.6%
Defense 18.51 +1.3% +10.1%
Nanotech 9.99 +1.3% +0.0%
Alt. Energy 9.95 +1.4% -4.4%
Water 18.31 +1.1% +12.2%
Insurance 16.07 +1.2% +18.3%
Biotech 20.58 +1.1% +27.1%
Retail 19.65 +0.1% +28.4%
Software 24.59 +0.9% +24.1%
Big Tech 53.73 +1.0% +21.9%
Construction 12.99 +2.1% +13.3%
Media 13.57 +1.1% +25.0%
Consumer Svcs 67.26 +0.8% +23.3%
Financials 54.87 +2.4% +5.2%
Health Care 64.22 +0.7% +1.3%
Industrials 63.25 +1.6% +19.7%
Basic Mat 73.57 +1.6% +21.6%
Real Estate 55.24 +1.4% +23.8%
Transportation 91.17 +1.4% +25.6%
Telecom 22.48 +1.1% +17.1%