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First Gold, Silver, Maybe Sugar, and Now Soybeans?

Published 10/24/2024, 02:15 AM
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If this is truly shaping up to be a time for commodities, especially ones undervalued, then let’s expand beyond gold and silver.

Don’t get me wrong.

I see more upside in both metals.

Remember my trifecta of inflation indicators?

  1. Silver to gold-has to outperform-maybe starting
  2. The Dollar breaks 100-not yet
  3. Sugar-has to clear 22.50 cents a pound-almost

Add to that soybeans because often we have seen silver and soybeans rally together.

Here is sugar right nowSugar Futures-Daily Chart

I see a massive bull flag forming with a measured move slated for sugar to make a new 52-week high if the pennant of the flag breaks out to the upside or at around $.22.5 cents a pound.

Note how it is about to outperform SPY on the Leadership chart.

And by the way, gold, silver, sugar and now perhaps soybeans are all rallying with higher yields and a stronger dollar.

Imagine if that changes and yields drop while the dollar softens?

Looking at the soybeans chart:

The daily chart on soybeans looks like a double bottom from August and now October.

In fact, if the November futures contract can clear the 50-DMA (blue), it also confirms that a double bottom is in place.Soybeans Futures-Daily Chart

Furthermore, the momentum indicator or Real Motion is flashing a bullish divergence as the red dots are approaching the 200-DMA while the price chart shows price far away from its 200-DMA.

Leadership is also interesting with Soybeans about to perform on par with the benchmark.

The warning I wrote about yesterday in junk bonds HYG, sent the market lower.

However, many other voices in the room feel the same as I do-commodities are the way to go as we end this year and into the next one.

ETF Summary

(Pivotal means short-term bullish above that level and bearish below)

  • S&P 500 (SPY) 575 support 585 resistance
  • Russell 2000 (IWM) 215 support 227 resistance
  • Dow (DIA) 420 support
  • Nasdaq (QQQ) 485 pivotal support 500 resistance
  • Regional banks (KRE) 60 pivotal
  • Semiconductors (SMH) 242 support 265 resistance
  • Transportation (IYT) 69.50 support
  • Biotechnology (IBB) 140 support and like better over 142
  • Retail (XRT) 74-75 support to hold
  • iShares iBoxx Hi Yd Cor Bond ETF (HYG) 79.50 nearest key support

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