#ThomsonReutersCommodityIndex Need a weekly close above 222 for a BO and bigger rally to resume in #commodities

#Sail #JSWSteel updated chart - what we saw yesterday could be completion of 4th down. Both are at supports.

One secret to catching big winners:

1. In a bull market like this, stock should have atleast done more than 50% in last 6 months.

2. Stock should trading within 25% of 52 week highs

3. Should be breaking out of base or recent highs after correction

@chartmojo @caniravkaria

Offcourse, this rule does not to recently listed stock as there is no history. They could still do well otherwise.

A classic early sign of a commodity cycle.

Mining industry nonfarm payrolls near historical lows.

This happened in early 1970s & 2000s.
Both marked the onset of a commodities bull market.

Labor & capital constraints are the amplifiers of bull market in resource stocks.

👇👇👇

Energy & soft commodities are obviously not mining related.

See below the nonfarm payrolls for oil & gas extraction which is also at historical lows.

To recall:

The green agenda hasn’t even started.

The decline in agricultural workers look even more severe.

To be fair, this is not a domestic problem.
We’re are experiencing similar issues worldwide.

This pandemic has truly magnified a long-term trend of labor reduction and under investments in the commodities space.

Resource companies have been facing a deep recession for some time now with not enough workers willing to enter this industry.

On top of it:

Government policies seem to be discouraging folks from return to the labor market.

People continue to leave the labor force like never before.

@nishkumar1977 #commodities Nishant, have a look at return by this fund ;) #mutualfunds #iciciprudential

In the last commodity Bull cycle of 2001-08, the commodity index moved from 145 to 475, a rise of around 3X.

We are at 186 which is historically at very low levels. A rise to levels last seen in 2008 and even more would make #Commodities a lucrative

#copper
I keep seeing this Wood-Mackenzie chart in every copper presentation. I started my career in 1994 when the market was about 10Mt and Sumitomo embarked on a massive attempted copper market squeeze.

#copper
There are copper projects out there, of course, and they are all raising capital and advancing feasibility studies. But I strongly contend that there are not enough and they cannot be built in time to meet expected demand.

#copper
10 years of below trend copper exploration has consequences.
My very strong view is the only way out of this situation is for the copper price to go to a level where demand is substituted or destroyed.

#copper
Speaking to a copper concentrates trader yesterday and a Chinese smelter just paid a Treatment Charge of $10 for a spot parcel. (TC's are the allowance that miners pay smelters to turn conc into metal.) Historic average is closer to $70.

#copper
Only way the smelter can make money on a $10 TC is if the copper price goes up - this smelter clearly gambling on that!

Commodity Supercycles.

Hit the 're-tweet' & help us educate more investors.

A micro thread 🧵👇

1/ What is a commodity supercycle?

They are near decade long periods where commodities trade well above their price trend

supercycles are rare

Going back 100 years, Only 3-4 supercycles have been identified & each was tied to a transformational period of economic development.

2/ A one-two year rally in commodity prices is NOT a supercycle, rather could just a rebound from an imp. event as what even happened after the 2008 great recession.

3/ Two commodity supercycles have occurred since the end of World War II.

The 1st started in the mid of 1960s & lasted through the 1970s.

Likely driven by a collapsing US dollar, higher inflation & 2 oil price shocks.

4/ Why US dollar is an important monitorable?

Raw materials are almost always priced in US dollars.

When the value of the dollar drops, it costs more dollars to buy commodities. At the same time, it costs a lesser amount of other currencies when the dollar is moving lower.