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Time For Commodities To Out-Perform Equities For Years To Come?

By Chris KimbleStock MarketsNov 10, 2021 09:58AM ET
www.investing.com/analysis/time-for-commodities-to-outperform-equities-for-years-to-come-200607944
Time For Commodities To Out-Perform Equities For Years To Come?
By Chris Kimble   |  Nov 10, 2021 09:58AM ET
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S&P 500 And Commodities Index Combined Monthly Chart.
S&P 500 And Commodities Index Combined Monthly Chart.

From 1999 to 2009, equities underperformed commodities. This culminated with the ’08-’09 financial crisis.

This was followed up by a 10+-year run of equities outperformance. Are the tables ready to turn yet again?

Today’s chart looks at the ratio of the S&P 500 Index to the Thomson Reuters CRB Commodities Index on a “monthly” basis.

As you can see, it might be worth keeping an eye on the triangle pattern that has been forming. The ratio peaked in 1999 and began forming a triangle pattern that saw support break and hold at (1). This led to a period of equities underperformance. Fast-forward to today, and you can see a similar pattern has been taking shape, with important support developing at (2).

This is worrisome, as it is occurring amidst growing inflationary concerns.

If support at (2) should break, it would send a strong message to commodity bulls and increase the prospect of future price advances for commodities. This would also increase the prospect of equities underperformance for the foreseeable future. Stay tuned.

 

Time For Commodities To Out-Perform Equities For Years To Come?
 

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Time For Commodities To Out-Perform Equities For Years To Come?

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Comments (2)
my name
my name Nov 10, 2021 11:03PM ET
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can I see 100 year chart? 20 years is not representative!
Shane Zhang
Shane Zhang Nov 10, 2021 6:01PM ET
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We could be in a deflation after fed is printing all the easy money and now they have pull the plug.  Maybe Commodity will drop less compared to SP500
 
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