Data-Driven Commodity Research, The Commodity Report

The Commodity Report

Data-Driven Commodity Research

A unique newsletter about commodities and macro analysis in a weekly format.

Commodities

<ul><li>Sentiment is very important when it comes to trading any financial asset. In terms of commodities, Goldman Sachs seems to be still a bit too optimistic for me.</li><li>This year has started with a pullback in prices driven by warm weather shock and rising interest rates, Jeff Currie, the head of commodities at the investment bank, said at a presentation in London on Monday.</li><li>But demand in China starting to rebound and there’s insufficient investment in supply, meaning the year as a whole will be a “Goldilocks” moment for rising prices, he said. </li></ul>

Sentiment is very important when it comes to trading any financial asset. In terms of commodities, Goldman Sachs seems to be still a bit too optimistic for me.This year has started with a pullback in prices driven by warm weather shock and rising interest rates, Jeff Currie, the head of commodities at the investment bank, said at a presentation in London on Monday.But demand in China starting to rebound and there’s insufficient investment in supply, meaning the year as a whole will be a “Goldilocks” moment for rising prices, he said. 

<ul><li>Commodity trading houses have shown a stunning performance since 2020.</li><li>So far, there are only a few arguments for why this should change in the near future.</li><li>But also precious metals miners are shining - nevertheless, they have quite some performance to pick up compared to other miners as well as the broad commodity market.</li></ul>

Commodity trading houses have shown a stunning performance since 2020.So far, there are only a few arguments for why this should change in the near future.But also precious metals miners are shining - nevertheless, they have quite some performance to pick up compared to other miners as well as the broad commodity market.

<ul><li>In the world of natural resources, iron ore is probably the most China-centric commodity — even more than crude oil, copper or soybeans.</li><li>Beijing accounts for more than 70% of the world’s imports of the mineral.</li><li>Therefore it’s not hard to see that there is a direct correlation between Iron ore prices and the health of the Chinese economy.</li></ul>

In the world of natural resources, iron ore is probably the most China-centric commodity — even more than crude oil, copper or soybeans.Beijing accounts for more than 70% of the world’s imports of the mineral.Therefore it’s not hard to see that there is a direct correlation between Iron ore prices and the health of the Chinese economy.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Market dynamics remain largely bearish/unchanged, and we are sticking with our call that breaks of supports on SPX, IWM,QQQ are likely to result in a test of the 2022 lows.</li>
<li>The Nasdaq 100 (QQQ) is already testing its 2022 lows, but the S&amp;P 500 and Russell 2000 (IWM) are still 6-9% above their 2022 lows.</li>
<li>Depending on how the market responds to its 2022 lows, that could be a better area to increase risk.</li>
</ul>


Market dynamics remain largely bearish/unchanged, and we are sticking with our call that breaks of supports on SPX, IWM,QQQ are likely to result in a test of the 2022 lows.
The Nasdaq 100 (QQQ) is already testing its 2022 lows, but the S&amp;P 500 and Russell 2000 (IWM) are still 6-9% above their 2022 lows.
Depending on how the market responds to its 2022 lows, that could be a better area to increase risk.


More Downside to Lead to Buying Opportunity?; Buy Ideas in Consumer Staples, EU Banks, Gold Miners

<ul><li>What a year it was for European energy prices. Every time it gets emotional, prices behave volatile and sometimes also irrationally.</li><li>That was the reason why <a href="https://commodityreport.substack.com/p/time-to-fade-the-eu-energy-crisis" target="_blank" rel="noopener">we called for a peak in European energy prices already back in August of 2022.</a></li><li>Back then, prices were astronomically high. Per BTU, you had to pay $93 for US crude oil, $500 for European TTF natgas, and meanwhile, “only” $54 for US Henry Hub natgas for the forward futures contract.</li></ul>

What a year it was for European energy prices. Every time it gets emotional, prices behave volatile and sometimes also irrationally.That was the reason why we called for a peak in European energy prices already back in August of 2022.Back then, prices were astronomically high. Per BTU, you had to pay $93 for US crude oil, $500 for European TTF natgas, and meanwhile, “only” $54 for US Henry Hub natgas for the forward futures contract.

United States

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, also known as a fossil fuel, which means that it can't be replaced naturally at the rate we consume it and is therefore a limited resource.

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Crude Oil (CL1 COM COMDTY)

The Commodity Report #87

Sentiment is very important when it comes to trading any financial asset. In terms of commodities, Goldman Sachs seems to be still a bit too...

The Commodity Report

The Commodity Report #86

Commodity trading houses have shown a stunning performance since 2020. So far, there are only a few arguments for why this should change in the...

The Commodity Report

The Commodity Report #85

In the world of natural resources, iron ore is probably the most China-centric commodity — even more than crude oil, copper or soybeans.

The Commodity Report

More Downside to Lead to Buying Opportunity?; Buy Ideas in Consumer Staples, EU Banks, Gold Miners

With market dynamics still bearish, we are sticking with our call that breaks of supports (3910 on SPX, $177.50 on IWM, and $279 on QQQ) are likely...

Vermilion Research

The Commodity Report #84

What a year it was for European energy prices. Every time it gets emotional, prices behave volatile and sometimes also irrationally.

The Commodity Report

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