The renewed collapse in WTIC Oil prices today was certainly dramatic, with Oil set to lose the $60 threshold. Next year is offering oil prices consistently trading within the $70/40 zone, which is extremely bullish for the world economy. Similarly, Copper remains broadly weak.
WTIC, monthly'2, rainbow
Copper, monthly
Summary
A new multi-year low for WTIC Oil of $60.43. The $60 threshold will no doubt break.. whether tomorrow, Friday..or early next year.. it should make little difference for those with eyes on the bigger picture.
Having fallen from the June high of $107, a significant bounce is very likely though, on the order of $10/15. So.. if we floor around $55.. then 65/70 looks a very reasonable short-term upside trade.
As for Copper... it is consistently trading under the key $3 threshold. Considering the strength in the US Dollar, and numerous other issues, renewed weakness to the 2.30/20s looks probable. If correct, that will have severe bearish implications for stocks such as FCX and TCK.
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**Bonus chart**
CRB vs sp'500
Commodities are back to levels last seen in summer 2010.. when the sp'500 was around 1000. This great pull back from the high in 2011 makes for massively lower costs to everyone.
Further, the disparity between commodities and stocks has not been higher since 1999. At some point...the gap will largely close. My guess is that commodities will eventually recover as much of the new (QE) money finally starts to filter into the global system.
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Late night update from Mr Permabull
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Looking ahead
Along with the usual weekly jobs data, Thursday will see the only significant econ-data of the week... retail sales.
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Goodnight from London
