Playing Commodities Super-Cycle with GSG /2:1 Reward/Risk rationGSG is a nice way to play Commodities Super-Cycle in a diversified style.
at current level the risk to reward is about 1/2, which makes it attractive long position.
GSG trade ideas
GSC - Goldman Sachs Commodity Index - Bullish UpTrend intactGSC - Goldman Sachs Commodity Index - Bullish UpTrend intact.
Broken red long term DownTrend line.
Reverse yellow Head & Shoulders reversal pattern.
New Green UpTrend line being adhered too.
Commodities Breakout from VCPPivot: 24.65
Stop: 24.25
Avg Cost: 24.75
Risk From Pivot: 1.63%
Position: Half Defensive (250 USDs) as stop is super tight and a strong gap down can be multiples of my risk.
VCP Breakout on the Goldman Sachs Commodity Index. Added some exposure to my portfolio with this small trade.
Over all exposure now 12.5% mainly on commodities and health sector. Waiting for trades to move handsomely from pivots so I can start taking some profits, moving stop losses, and maybe start getting more aggressive. One day at a time.
Commodities Only Go DownVery few traders understand the fundamental reasons why Commodities Only Go Down. I will educate you.
Let's take an example of Corn. Over time, what happens with corn?
- We discover new ways of producing corn
- We create cheaper ways to produce corn
- We find faster ways to produce corn
- We learn easier ways to store corn
- We learn how to store corn for longer
- We create better supply chain structures to distribute corn
This constant pressure of innovation decreases the *cost needed to create corn*, and as a basic rule of economics, the price itself always trends towards the production cost. This is for the same reason that Televisions, Phones, Computers, Cars, and many other types of technology have become dramatically cheaper over time.
Note that we use the USM2 money supply in this chart, because for charts lasting more than a few years you should always adjust for inflation. In my view of the market, inflaton = an increase in the money supply. Most disagree, because they have been lied to and tricked by the government.
What is the point of this?
1) Do not invest in commodities
2) DO invest in companies that will capture all the value from innovating and making commodities cheaper
Thanks for playing.
Commodity BasketLets see how this retracement pans out. Unless supply chains are fixed overnight and the de-globalization narrative changes I would expect the yellow box area to act as support. Volatile environment out there - keep your size in check.
Commodities short term pullback? (3/5)Conviction: 3/5
Risky over the next 6 months, perhaps triggered by fed raising rates in March?
Commodities ( AMEX:GSG , AMEX:DBC ) showed real strength over the last two years.
However, looking at weekly RSI it looks a bit exhausted (using data from bear market in the last 10 years)
Typically with breakouts, the asset will retest former resistance.
Also, looked like 5 waves up from 2020 low. Reaching fib level 2. Invalidated if it goes up?
Long-term view still positive.
GSG (GSCI) - Faces serious resistance and div RSI shorter termGSG (GSCI) - Faces serious resistance and divergent RSI
Red line, once support, become resistance since 2015.
GSG - Commodity Indexed-TrustWe continue to like GSG and commodities in general. This morning GSG gapped up 24 cents. Energy & grains look great fundamentally. Grains especially, supply is low and agricultural yields weak. We are watching the dry conditions in Brazil and if they persist that will bullish for grain prices. Energy continues to grind upward, Crude , Nat Gas , and Heating Oil have been strong.
We continue to see low numbers from export inspection reports.
www.ams.usda.gov
We are happy to see the RSI trend reversal.
The highs in January 2020 have been broken. If we are north of $16.50 -$16.60 then we like the play still, if we dip back below then we will have been stopped out.
We'll watch to see if this can crack the October 2018 highs, if it can, we may see the 1.618 fib level at $22.15
Cheers
REFLATION FINISH LINE?Potential ending diagonal for commodities.
Overbought weekly RSI with divergence into an area of resistance.
Bond market has been telling us that the inflation hysteria was overdone and the crowd was all on one side of the boat.
Energy held strong while most other commodities have rolled over. Energy may join now.
Even if you believe that we have started a new commodity bull market, nothing goes up in a straight line.
as always for entertainment purposes only.
GSG - iShares S&P GSCI Commodity-IndexedGSG is showing a strong upward trend since the low of March 2020. GSG has maintained a trading channel. We are long in the short to medium term. We have support at $14.63 which is shown in the fib retracement and by the trading channel prior to the COVID pandemic. We have an exit price of near $16.50, we expect to see resistance at the upper bound limit of the pre-COVID trading channel.
The macroeconomic backdrop supports upward price action. We will continue to watch inflation data announcements. We are looking for qualitative & quantitative information that might support a breakout above the pre-COVID trading channel.
Commodities - Is this thing getting ready for Blast Off?Seeing $12.75 Gap Fill, then stairstep $13.49, $14.15, $15.00, $16.16, $18.80? Thoughts?
Potentially undervalued counter-cyclic asset classHello, Thanks for viewing.
Really nice to see the encouragement and feedback from my last post about the gold/silver ratio.
This is to share another of my recently entered, but shortly to grow significantly in size, positions. Boring old Commodities. If you look at a long-term chart, commodities have been on a largely downward slide for over 29 years. I just looked up a 100 year Commodities chart and had a chuckle reading how a blogger was calling the bottom on commodities in 2017 when the index was around 40% higher than now (blog.gorozen.com). So, I realise that it is unlikely that I started looking into commodities right at the bottom of the market. Still, there are good reasons to be a buyer.
1. From TA, it looks like we are nearing a bottom. I would tentatively put it between $5.40 and $3, however, things can change quickly and I decided to start creating a position,
2. I like Ray Dalio, I like him so much I have invested into GSG despite overall very negative outlook on ETFs (please please don't invest in GLD). So Ray Dalio was talking on a YT video with Tony Robbins (yeah the guy with the huge teeth) about his all-weather portfolio. Since, in early 2019, I was trying to find a way to "recession-proof" myself in expectation of a recession (The US was nearing its longest and weakest expansion in history with rather high debts - I never would have guessed that in a recession that already overvalued stocks with no chance of producing a dividend return would become the stock-market darlings). Check out the basics of his portfolio here: www.lazyportfolioetf.com Now, I haven't done all of it and I probably won't. I started with stocks (up to 30%), Precious metals (supposed to be 7.5% but I have replaced a significant portion of the bonds in the portfolio with precious metals - because of the negative real return of treasuries. I have posts about the S&P500, Shiller 10 year PE ratio, and my treasuries entry - which would have been in Oct 2018 - if I did pull the trigger. At the time, I thought the bonds return was too low to warrant an investment... turns out 3% wasn't that low after all.
Long story short, I am probably 30% precious metals, 10% bonds, 30% stocks, <1% GSG but adding more up to a goal of 7.5%, the rest is cash looking for a home in income-producing real assets at some future date (and some crypto). I am buying, even though I think we aren't yet at the bottom, just because of how difficult it is to pick the low point in the market.
Commodities have bottomed out in 1929 (that seems a significant date), the mid to late 1960s, and a 10 year down-trend pulled back around 1998-9. I am especially interested in the 1929 bottom, that happened around the time equities reached all-time high valuations in terms of PE and Market Cap/GDP (of course these have been exceeded in the current market). I feel we are approaching a 1929 type of moment.
There are some interesting things happening of late; massive demand increases and shortages for both physical bullion and lumber (lumber isn't on the ETF) as people move away from intangible assets and populated main centres etc. There is a very real possibility that people will look to other tangible things, things with inherent value, should paper assets and a vast array of financial derivatives blow up (again). Add in the Fed's goal to stoke inflation (and then stop it again when it reaches its target) and we have at least a possibility, an outside chance, that Commodities will be valued higher. I'm sure I had more to say, but I am watching the Dow drop like a stone.
Protect those funds
GSG BUY OR LONG , TARGET UP TO $13.35GSG pattern "SHS" confirm up today .
GSG buy : $10.50
Target : $13.35
Stop loss : 10%
Wish you good deals!
Slowly but surely. Hello all,
Welcome to a somewhat time sensitive entry into the GSG commodity index trust.
Low was sub 13. Looks like we will be making a push above the 200 day ma.
I am obsessed with building a 100 dollars a day portfolio in any climate. The idea is to use the lowest possible principal and produce 100 dollars a day regularly without fail. Open to thoughts.
Wealth and health; Cheers.
A good traveler has no fixed plans, and is not intent on arriving.
~Lao Tzu
