The past year month has been flowing into risk on assets like US equities. And when money is flowing into one investment class there is typically an outflow in others. Commodities in general have been beaten up bad but there is some money to be made here using the livestock COW ETF.
I is amazing how almost all us equity sectors have rallied as big as they have with many still making new sector highs. The only true weak areas in the market look to be commodities specifically precious metals, oil, natural gas, grains, sugar and livestock.
When the US equities market starts to sell off and volatility rises money should start to flow into some of these underperforming areas. At the moment COW is the only one that looks ready for a bear market rally currently.
Precious metals miners are another area I am looking to trade but I have not seen any signs why anyone should enter yet.
The chart below shows my analysis and forecast going forward. Those who prefer trading spot prices via FOREX/CDF/Spread Betting can use a company like AVAFX which I use also. The nice thing about trading this way is that you can trade 24/7, you get a lot of leverage, and it’s commission-free trading.
To Have A Cow Or Not? That Is The Question!
The COW ETF could be a choppy ride for a while, but the upward momentum looks to have started as of today.
I am currently long COW with my peak target set around the $29 level.
Follow all my trades in real time at www.TheGoldAndOilGuy.com