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How High Can the Commodities Bull Go?

How High Can the Commodities Bull Go?. We are in a commodities bull market. Commodities started rising around 2000 Some commodities were at their lowest levels in over a century Just about everything has been going up Beginning to get media coverage

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How High Can the Commodities Bull Go?

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  1. How High Can the Commodities Bull Go?

  2. We are in a commodities bull market • Commodities started rising around 2000 • Some commodities were at their lowest levels in over a century • Just about everything has been going up • Beginning to get media coverage • Many wondering if it's almost over or if this is just the beginning • We may be half-way through; plenty of opportunities left for investors and speculators

  3. Difference between secular/cyclical trends • Cyclical trends last a few years • Ex: Stocks were in a cyclical bear from 2000-2003 and a cyclical bull from 2003-2007 • Secular trends (big picture) last two decades • Ex: Stocks have been were in a secular bull market from 1980 to 2000, and have been in a secular bear market from 2000 to the present • Commodities and stocks usually run inverse to one another

  4. Dow 2000 chart

  5. Dow 1980 Chart

  6. Long Term Chart

  7. 1970s Commodity Boom • Best comparison to current boom • Lots of similarities • Supply-Demand imbalance • Inflation • War • Pessimism • A good guide to what could happen today

  8. S&P 1970s

  9. Corn

  10. Sugar

  11. Gold

  12. Silver

  13. Recap • In the 1970s... • The S&P dropped 50% • Corn rose 3x • Sugar rose 17x • Gold rose 23x • Silver rose 27x

  14. The Commodities Bull is Not Over • Investors need to keep in mind the long-term, secular trend • Don't get scared out by the dips • Avoid frequent buying/selling • ETFs are great • Traders should buy on the dips and keep enough margin to allow for wide swings • Don't let your bullishness get the best of you • There will be dips; they are good buying oppt's

  15. Good resources • “Hot Commodities” by Jim Rogers • ChartsRus.com: Tons of interesting long-term charts • TimingCharts.com: Best site for futures charts • Futures.TradingCharts.com: Intraday quotes and historical charts

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