Tariff Wars May Be Bringing A Crash Bottom In Some Commodities – Mike Swanson (05/15/2019)

The trade tariffs have hit the stock market a few times with a nasty Monday drop. Even though it bounced yesterday I believe it is in a correction that is likely to now last a few weeks.

I talked about this in an interview with Jim Goddard that you can listen to here:

http://wallstreetwindow.com/2019/05/interview-market-bounces-may-not-be-connected-to-trade-wars-mike-swanson05-15-2019/

But there are some things that have been hit so hard that they may be forming major bottoms.

Take a look at what has happened with agriculture commodities.

This is the DBA agriculture ETF (which I now have a small position in).

Obviously, DBA has dumped in the past few weeks. This is a potential bottom in the making, similar to the panic bottom that came in the summer of 2015. Of course, even if it is a final bottom coming for DBA it will still likely to months to base before it can rally through its 200-day moving average and it can still make a new low.

But it would not be a shocker to see a panic final bottom form with DBA associated with more final tariffs from China on agriculture commodities in the US.

How much worse can the news get now for this sector?

Notice that on this chart the RSI went below 30 and actually down to 20. That’s an extremely low rarely seen level for this RSI indicator that came with a rate of change for the 12-day price of DBA over -5%.

A move that fast down in DBA only has happened a few times in the history of the ETF.

DBA has been in a bear market since 2011 and will eventually go into a new bull market. With commodities historically, gold and silver go into new bull markets, then soft commodities, such as agriculture, and then energy.

So I’m looking at this to go into a new bull market in the future – not today or next week, but in time and I have a small investment position I plan on building over time.

I know this doesn’t interest most people who read this – I just want you to know what I’m seeing this week that’s interesting.

Oh, and it is soybeans that have really gotten crushed – here is the soybean ETF.

Look at that RSI reading for SOYB – that’s a crash.

I did an interview with Jim Goddard about the stock market and gold you can listen to here:

http://wallstreetwindow.com/2019/05/interview-market-bounces-may-not-be-connected-to-trade-wars-mike-swanson05-15-2019/

Now if you take advantage of my special book giveaway offer for my classic book Strategic Stock Trading you’ll also get into my private trading group.

I got a box of books and I’m selling each copy I have until they last at cost. I’ll even pay the shipping for you so it costs you practically nothing to get started.

To get started just go here:

http://wallstreetwindow.com/strategic-stock-trading-book-offer

-Mike



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