ln early May, we saw a peak in many commodities, excluding energy. Soft commodities made a double top in June and then pulled back hard. I believe we now have a decent entry point in the DBA ETF, which is a soft commodity agriculture ETF that I own as a core position in my IRA and main account. This ETF appears to be making a double bottom above its 150-day moving average with its daily stochastics indicator signalling oversold by trading below 20.
Although I bought this ETF as a core position last year, in the spring, and many commodities went up into May, the mainstream financial media barely remarked on the runs going on across the board in these commodities until April. Then everyone took notice of the inflationary price advances and began to worry about the coming big CPI prints.
Those prints came and went and as all the news hit commodities made a short-term peak. Now they appear to have gone through a nice consolidation phase and have presented what appears to be a nice entry point here. One could buy DBA and put a stop loss in, for instance, under its 150 or 200-day moving average.
This is one reason I don’t think we’re headed for a big collapse in gold, but instead some sort of sideways stabilization is how to understand its current trading action. There are areas of the market to be cautious with, as many of the past fad stocks of last year are still lagging the market, but I do not think the June gold drops does not represent the start of a meaningful downtrend, but a sideways consolidation.
As a macro investor I think we are seeing a pause in inflation that will come back.
Real estate prices are also rising in a bull market and are part of this inflationary trend too. They are up nationally over 14% in the past twelve months. Last year around September I decided that I wanted to invest in real estate and looked at the various ways that I could do it. I came to the conclusion that the best and simplest way for me to do it was on the stock market. In this video I talk about an exchange traded fund I own in my IRA that does this and the Colombia Property Trust company that I own a position in too also. I like investing in stocks that pay dividends, having steady earnings, instead of real speculative money losing companies that are so popular right now, but tend to be flashes in the pan.
-Mike
