The Time is Now for Commodities

While skeptics will surely point to the recent unwind in cocoa's parabolic move, the reality is that commodities are staging an impressive, broad-based rally today after some generally mild recent consolidations almost across the board. 

You may also notice that some of the more notorious commodities, regarding prior false breakouts and crushing the hopes of bulls, are leading. Of course, I am referring to natural gas and silver surging higher today. 

But even within soft commodities (DBA ETF. e,g,) we have rotation that has been noted here and with Members of late: Out of cocoa and into the previously-lagging ags like wheat. Indeed, on the updated WEAT fund daily chart, below, we can see the push above the 200-day moving average, which marks a change in character after previous attempts to hold above failed miserably. 

Similar rotations are beginning in corn and soybeans, too. 

Crude oil is also up on the day, too. However, the more potent action can be seen in the oil stocks in the XLE OIH XOP ETFs, which is typically a sign of bullish risk appetite, to see the stocks leading the underlying commodity--We saw the same dynamic with precious miners and their metals of late. 

Overall, I am bullish on commodities for a mix of technical and macroeconomic reasons.

If The Fed wants to "let" inflation run hot again, then a hot summer it is.