📊Commodities Making a Comeback? Part 1/3
📊Commodities Making a Comeback? Part 1/3
Embark on our three-day journey into Commodities Market Analysis to discover whether now is the right time to invest in commodities.
Commodities Making a Comeback?
We are embarking on a three-day journey into the commodities market, exploring three key topics:
1. In What time of the Market Cycle Commodities are Now?
Today, you will learn which phase the Commodities Market is currently in, and whether it's the right time to invest.
2. Maximizing Returns and Minimizing Risks in the Commodities Market
Tomorrow, we will delve into strategies for maximizing returns and minimizing Risks in the Commodities Market. This will include a detailed statistical analysis, focusing not just on whether to invest, but also on how much to invest in order to optimize returns.
3. Optimizing a Dynamic Diversified Portfolio with Commodities Market
On the third day, we will discuss how to incorporate the Commodities Market into a dynamic, diversified portfolio. This approach aims to enable investors to capitalize on positive market cycles while maintaining controlled risk.
Note from the Author
This post sequence is not a one-way road, It's a conversation between you and me. Feel free to answer the quizzes, let me know you and your doubts and suggestions.
You will be able to send me tickers for a personal analysis. And yes I personally answer all responses. That’s why we do a 3-day journey, so I can answer everyone. Go ahead test me.
January 2024 presented mixed results in global markets, a contrast to the consistent growth seen in 2023. This highlights the unpredictable nature of market cycles, emphasizing the need for astute strategy adaptation.
Notably, commodities market experienced one of the best performances in January 2024. This resurgence in commodities underlines the dynamic nature of market cycles.
The iShares S&P GSCI Commodity-Indexed Trust GSG 0.00%↑ ETF, holds long positions in index futures that have settlement values at expiration based on the level of the S&P GSCI-ER at that time, and earning interest on its non-cash Collateral Assets used to satisfy applicable margin requirements on those index futures positions (Yahoo Finance).
With a 4.4% gain, emerged as a beacon for investors, indicating a potential market turnaround. But should you have GSG 0.00%↑ in your Portfolio now?
Let’s dive in, first you need to understand the psychology of the Market Cycle.
Understanding the Psychology of The Market Cycle Chart
Phases of Market Cycle and Associated Emotions:
Phase 1 - Hope: Characterized by strong companies with growth potential and increasing institutional interest.
Investors Approach: Investors should detect early price shifts, focus on fundamentally strong assets, and await confirmation of an uptrend.
Phase 2 - Optimism: Indicated by price stabilization after a decline, hinting at a potential market bottom.
Investors Approach: Investors should observe the market for signs of stability and potential recovery.
Phase 3 - Belief: A strong uptrend phase with increasing buying pressure.
Investors Approach: Best reward/risk point for buying to maximize returns but also implement trailing stop to guard profits.
Phase 4 - Euphoria: Marked by high public and retail investor interest, leading to rapid price increases.
Investors Approach: Caution is advised as large institutions may start exiting. The focus should be on monitoring for signs of market saturation.
Phase 5 - Anxiety: When the uptrend begins to lose momentum, suggesting a potential market peak.
Investors Approach: Investors should be wary of market weakness and prepare for potential downturns.
Phase 6 - Denial: A significant market reversal, signaling a shift to a bearish environment.
Investors Approach: Investors should emphasis on risk management, prioritizing capital preservation, and considering defensive strategies.
Understanding the phases helps the investors to invest smartly.
By identifying the exact points of buying and selling, to maximize returns and protect their capital. It's a step ahead of the “buy and hold” strategy, the investors hold the assets only during in Positive Cycle or phases 3, 4 and 5.
In what time of the Market Cycle Psychology Chart GSG 0.00%↑ is now?
ANSWER: As seen in the Graph above, the GSG 0.00%↑ ETF is in EUPHORIA Phase 4 in February/24 according to the Alpha Hedge Algorithm.
Yes, you can include GSG 0.00%↑ in your portfolio now, as it is currently in a positive cycle.
But does this apply to all Commodities Market? Let's explore this in today's quiz.👇
Wall Street Insider Quiz (+Bonus)
If you answer all the 5 quizzes of the 3-day posts about the Commodities Market, you will be awarded 30 days of free access to the Wall Street Insider Report Premium, a bonus valued at $80.00*.
*If you already won this Bonus in the last 12 months, I will surely answer you, be you will not be able to receive the 30 day access to the Wall Street Insider Report Premium.
Quiz 1: I Quiz You
Now look at the graph of DBC 0.00%↑ . The fund pursues its investment objective by investing in a portfolio of exchange-traded futures on Light Sweet Crude Oil (WTI), Heating Oil, RBOB Gasoline, Natural Gas, Brent Crude, Gold, Silver, Aluminum, Zinc, Copper Grade A, Corn, Wheat, Soybeans, and Sugar (Yahoo Finance).
*The answer will be in tomorrow’s post.
Quiz 2: You Quiz Me (Bonus)
Most of our clients are discreet and prefer not to share their questions in public comment sessions. So, through the Form below, send me an Asset Ticker and I will make an individual Market Cycle analysis for you.
If the Button doesn’t work, please click the link below or paste It in your browser.
https://forms.gle/hLeFGk2k9XzHgzsf9
✅1. In What time of the Market Cycle Commodities are Now?
Today, you will learn which phase the Commodities Market is currently in, and whether it's the right time to invest.
◼️2. Maximizing Returns and Minimizing Risks in the Commodities Market
Tomorrow, we will delve into strategies for maximizing returns and minimizing Risks in the Commodities Market. This will include a detailed statistical analysis, focusing not just on whether to invest, but also on how much to invest in order to optimize returns.
◼️3. Optimizing a Dynamic Diversified Portfolio with a Commodities Market
On the third day, we will discuss how to incorporate the Commodities Market into a dynamic, diversified portfolio. This approach aims to enable investors to capitalize on positive market cycles while maintaining controlled risk.