WTIC Oil, monthly'2, rainbow
Copper, monthly
Summary
WTIC Oil is just over a $1 shy of the big $100 threshold. Clearly, the growing supply from within the USA is helping to keep prices lower than they otherwise would be. Breaking and holding >$110 will be difficult, but it is surely just a matter of when...than if.
As for Copper, its trading within a fuzzy $3 to $4 zone. Only with a monthly close above..or below this zone will things become clearer. As it is, I have to assume Copper will be trading in the $4s later this year/early 2015.
A note on the CRB vs SP'500
The following chart highlights the continuing severe disparity between the commodity and equity market. At some point they will again meet.
CRB/SP, weekly
Arguably, worse case for the global economy is that equities will hold..or continue higher, and commodities will soar, in a rather scary inflationary jump. As it is, I still don't expect that for another year, but we could easily see the first sign of it by the early summer.
Key signs...Copper >$4, and WTIC, >$110.
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Looking ahead
The remainder of the week has a fair few things. Thursday has the usual jobs data, ISM manu', and construction.
*there is no sig'QE until next Tuesday.
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Wishing for a good year
In my view, the deflationary/doomer outlook had 2 chances in 2013...both of which failed. As others are also starting to note, we're seeing many of the world equity indexes going somewhat parabolic. Of course, many world indexes remain massively below their 2000/2007 highs, notably the EU PIIGS, China, and Japan.
Also important to note, many will be talking about how the first week or two of January will be a key sign of how the market will trend across the year. Generally, that is indeed the case.
I hold to the original outlook from last summer. A broad rally into late spring, then a summer/autumn smack down..before a final hyper-wave (especially in commodities) into late 2015/early 2016.
Good wishes for tomorrow..and indeed...all of the year ahead.
Goodnight from London