% | $
Quotes you view appear here for quick access.

SPDR S&P 500 ETF Message Board

  • silversplode silversplode Apr 21, 2013 4:25 PM Flag

    Dropping commodity prices....bullish or bearish?

    Dropping commodity prices were common in the 90's bull.

    The bull that started in March of 09 however was built on reflation, and that means stocks went up in lock steps with commodities.

    Recently we've had a market of mixed signals, where most commodities have been selling off, while stocks reached all time highs.....and then pulled back.

    For weeks on end everyone said we needed a pull back, if not a correction, and now that we've had a decent pull back with a potential for correction it seems many have become bearish.

    I see bottom at the lows on 4/18. If I'm wrong, it will be earnings season that proves it. So far it's a mixed bag, could go either way.

    I see higher highs on the horizon for now. Good luck to all.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Definitely bearish. Now however maybe the time to start buying names like clf, fcx, cat. If cat report is poor and these stocks go down i will be a buyer. I only trade options so I would be buying DITM jan 15 calls, I use a OTM calendar put to hedge the downside.

    • xtgeminiman Apr 21, 2013 6:44 PM Flag

      It's partly because of a strong dollar and partly because of no demand. Since the strong dollar is a result of a weak global economy, it's DEFINITELY bearish. Deflationary environments are NEVER bullish.

    • jrpowell01 Apr 21, 2013 5:37 PM Flag

      Short answer: bearish short term, bullish long term.

      • 1 Reply to jrpowell01
      • Could turn out to be the observation of the century.

        Falling commodity prices kicked off the great crash of 2008.

        And then the first round of QE came, but I do believe that the first thrust of the recovery had alot to do with falling oil, gas, cotton, other words, deflation had a positive effect.

        This view is highly speculative and dangerous given history.

        But with an increased money supply like we've seen, falling commodities and materials HAVE to be a big plus, provided it's not a spiral down on every front.

        I like that some sectors remain strong, but I do see troubling signs.

        Then again, ditto that to last November.

        Let's just pray for positive. I can go bull, bear, I don't care much, but most folks I know don't trade or pay attention to markets. They just work their butts off and hope that the retirement account gains.

    • FED less likely to hike rates in a deflationary environment.

    • Bullish for me.... Who is to say oil in the $60's and gold below $1,000 is deflation? As far as I'm concerned, they are still both to high.....

      Oil down is huge, more money in everyones pocket, immediate money, money that circulates every week....

208.90-2.42(-1.15%)May 5 4:00 PMEDT