Markets are always right

You know I have been saying for some time that the trend of commodities -- unchanged since June 2009 and down 10% since January -- was reflecting a weak economy.

Commodities are very sensitive gauges and they rise when the economy is strong and decline when the economy is weak.

The growth of the weekly leading economic indicator published by ECRI (chart courtesy of The Pragmatic Capitalist) fell to a 39-week low in the latest week. This gauge is pointing to an economic slowdown (click on the chart to enlarge it).

This is the main reason why all commodities --from gold to natgas to lumber to copper to crude to bond yields -- have been showing disappointing performance.

Let me repeat this idea one more time, Those observers who were expecting soaring inflation have been proven wrong, Deflation is more likely that inflation.

Your investment strategy should reflect these trends.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

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