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>With the beginning of this week’s newsletter, I probably won’t make any new friends in my home country.</li>
<li>What makes me sad is that literally nobody is speaking about the untapped natural gas reserves we have underground in Germany that are indeed accessible.</li>
<li>A short calculation: In 2021 Russia delivered 55 billion cubic meters to Germany or 55% of the total German gas consumption.</li>
</ul>


With the beginning of this week’s newsletter, I probably won’t make any new friends in my home country.
What makes me sad is that literally nobody is speaking about the untapped natural gas reserves we have underground in Germany that are indeed accessible.
A short calculation: In 2021 Russia delivered 55 billion cubic meters to Germany or 55% of the total German gas consumption.


<ul><li>Respect the trend - inflation continues to trend down but also continues to surprise on the upside in terms of analysts’ expectations.</li><li>Getting inflation back into the target corridor will be a slow and painful process as inflation is broadly driven by the components of shelter, transportation services, medical services, and not only food and energy, which get the most headlines in the newspaper.</li><li>On the other hand, we're on the right track, as the YoY comparisons have declined since July.</li></ul>

Respect the trend - inflation continues to trend down but also continues to surprise on the upside in terms of analysts’ expectations.Getting inflation back into the target corridor will be a slow and painful process as inflation is broadly driven by the components of shelter, transportation services, medical services, and not only food and energy, which get the most headlines in the newspaper.On the other hand, we're on the right track, as the YoY comparisons have declined since July.

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>Key supports are currently being tested at 3900-3910 on the S&amp;P 500, $293 on the Nasdaq 100 (QQQ), and $177-178 on the Russell 2000 (IWM).</li>
<li>We see a bounce as possible at these levels, but breaks below these levels would virtually guarantee a test of the YTD lows -- or worse.</li>
<li>WTI crude oil is breaking below the critical $85 support level, confirming a major top in place. The Bloomberg commodity index needs to break $32.50 to confirm a major top.</li>
</ul>


Key supports are currently being tested at 3900-3910 on the S&amp;P 500, $293 on the Nasdaq 100 (QQQ), and $177-178 on the Russell 2000 (IWM).
We see a bounce as possible at these levels, but breaks below these levels would virtually guarantee a test of the YTD lows -- or worse.
WTI crude oil is breaking below the critical $85 support level, confirming a major top in place. The Bloomberg commodity index needs to break $32.50 to confirm a major top.


S&P 500 Testing 3900 Support; Commodities, WTI Crude Oil Topping?; Buying Uranium, Ag Equipment

<ul><li>The benchmark, CRB Commodity Index, ended the week 3,5% lower</li><li>Things won’t get better and the current dump of energy products on the futures marketplace is in my opinion only a short-term phenomenon, caused by an ultra hawkish FED that will lead the economy into a recession and that probably with a hard and not a soft landing.</li><li>Since the covid pandemic began and economies around the world started to go all in on renewable plans, not only production capacity was shut down but also refinery capacity</li></ul>

The benchmark, CRB Commodity Index, ended the week 3,5% lowerThings won’t get better and the current dump of energy products on the futures marketplace is in my opinion only a short-term phenomenon, caused by an ultra hawkish FED that will lead the economy into a recession and that probably with a hard and not a soft landing.Since the covid pandemic began and economies around the world started to go all in on renewable plans, not only production capacity was shut down but also refinery capacity

<ul>
<li>The benchmark, CRB Commodity Index, ended the week 1,4% lower.</li>
<li>What bottoms usually first? Bonds! While we may be some weeks off the low in the treasury markets, I think it’s important to remember the typical cycle of asset classes.</li>
<li>Usually, treasuries bottom first, then follow stocks and at the end commodities. We saw the same cycle peaking in 2020 with bonds peaking first, followed by stocks and now commodities.</li>
</ul>


The benchmark, CRB Commodity Index, ended the week 1,4% lower.
What bottoms usually first? Bonds! While we may be some weeks off the low in the treasury markets, I think it’s important to remember the typical cycle of asset classes.
Usually, treasuries bottom first, then follow stocks and at the end commodities. We saw the same cycle peaking in 2020 with bonds peaking first, followed by stocks and now commodities.


United States

Natural gas is a naturally occurring hydrocarbon gas mixture consisting primarily of methane, but commonly including varying amounts of other higher alkanes, and sometimes a small percentage of carbon dioxide, nitrogen, hydrogen sulfide, or helium. It is formed when layers of decomposing plant and animal matter are exposed to intense heat and pressure supplied by existing under the surface of the Earth over millions of years. The energy that the plants originally obtained from the sun is stored in the form of chemical bonds in the gas.

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Natural Gas (NATURAL GAS COMDTY)

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A short calculation: In 2021 Russia delivered 55 billion cubic meters to Germany or 55% of the total German gas consumption.

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Respect the trend - inflation continues to trend down but also continues to surprise on the upside in terms of analysts’ expectations.

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S&P 500 Testing 3900 Support; Commodities, WTI Crude Oil Topping?; Buying Uranium, Ag Equipment

Key supports are currently being tested at 3900-3910 on $SPX, $293 on the $QQQ $NDX, and $177-178 on the $IWM. WTI crude oil is breaking below $85;...

Vermilion Research

The Commodity Report #60

The benchmark, CRB Commodity Index, ended the week 3,5% lower. Things won’t get better and the current dump of energy products on the futures...

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The Commodity Report #59

The benchmark, CRB Commodity Index, ended the week 1,4% lower. What bottoms usually first? Bonds! While we may be some weeks off the low in the...

The Commodity Report

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