As an investor, you never want to put all your investment eggs in one basket. In addition to investing in stocks, bonds, currencies, precious metals,  investing in commodities can provide yet another avenue to diversify one’s portfolio. Unfortunately, many investors overlook the opportunities available to them in commodities. There are several ways to invest in commodities, which are raw materials that are either used directly, such as food, or indirectly to produce another product.

If we look at the recent situation where the Covid lockdowns forced oil prices down to below $0 for a brief period of time. Savvy investors at the time took advantage of those once inn a lifetime global crisis to invest in oil and reaped massive gains as the global economy started to recover and the price of oil went from $0 to over $100.

You can invest in commodities in several different ways including by purchasing physical goods, such as gold, or by purchasing ETFs that track specific commodity indexes. You can also buy stocks of commodity-related businesses such as oil and gas producers or miners of base metals such as copper, zinc, nickel, ore, etc..

Some  of the most traded commodities are:

  • Oil
  • Natural gas
  • Metals
  • Corn
  • Wheat
  • Soybeans
  • Cattle
  • Hogs
  • Lumber

Commodity industries are all about supply and demand. In any individual commodity industry, the product is largely the same. Wheat is wheat, cattle are cattle. Because of this, producers are all price-takers and in normal times are not able to dictate prices. Many commodity industries are prime examples of what’s called perfectly competitive industries, with many buyers demanding an undifferentiated product and suppliers unable to offer differentiated products.

Here are some keys to think about when considering investing in commodities:

  • Investing in commodities can provide investors with diversification, a hedge against inflation, and excess positive returns.
  • Investors may experience volatility when their investments track a single commodity or one sector of the economy.
  • Supply, demand, and geopolitics all affect commodity prices.
  • Investors can trade commodity-based futures, stocks, ETFs, or mutual funds, or they can hold physical commodities such as gold bullion.

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Markets Rallying Into Resistance

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Market Summary – May 1, 2025

US stocks extended their rally Thursday:

  • S&P 500 rose 0.6% to 5,604.14, marking its 8th straight gain.
  • Dow Jones added 0.2% to 40,752.96.
  • Nasdaq surged 1.5% to 17,710.74, erasing April’s losses.

Microsoft jumped 9% after posting $70B in revenue, with strong AI-fueled cloud growth. Meta also beat expectations with a 16% YoY revenue gain and plans to ramp up AI capex.

Positive Big Tech earnings eased investor concerns about April’s market volatility sparked by Trump’s tariff threats.

S&P 500 Analysis: Nearing Resistance

In our latest Trend Letter outlook, we flagged 5,500–5,700 as key near-term resistance, with 5,800 as a structural cap.

Recent Price Action

  • Monday–Tuesday: Index reclaimed 5,500
  • Thursday: Closed at 5,604 – just 96 points below 5,700

Key Resistance Levels

  • 5,700–5,800:
    • 5,700 = 50% Fib retracement + March swing low
    • 5,746 = 200-day MA
    • 5,800 = March high

Catalysts & Risks

  • Bull Case: A breakthrough on tariffs could push the S&P beyond 5,800
  • Bear Risks:
    • Major resistance zone at 5,750–5,800
    • Sticky inflation: Q1 core PCE rose to 3.5% (vs. 2.6% in Q4 2024)
    • Tech valuations stretched – earnings must keep delivering

 Be very cautious buying stocks in the 5,700–5,800 zone.

Gold: Pullback in Progress

Gold dropped to $3,233/oz, a two-week low.

Drivers of the Decline:

  • Trade deal speculation reduced safe-haven demand
  • Rising USD pressured global buyers
  • Overbought conditions triggered profit-taking

As we warned in our April 21st update, gold is now hitting the top of two intersecting long-term channels—just like it did before its late-2022 low. This could mark a short-term top.

Support Levels to Watch:

  • Initial: $3,200
    • Deeper: $2,960 and $2,850

We believe a pullback here could set up a strong buying opportunity.

Bitcoin: Key Resistance Ahead

Bitcoin has rallied over 30% off its April low of ~$74K, now trading above $96K.

  • Cleared resistance at $92.5K
  • Next levels: $100K and all-time high at $108K

Momentum is strong, but BTC is nearing key psychological and technical resistance

Bitcoin has rebounded impressively from its April low of around $74,000, marking a 30% surge. It has now pushed through key resistance at $92.5K, which was a very strong previous support level.  The next resistance level is $100K and then its all-time high at $108K.

The S&P 500 is nearing our projected near-term top. Are you ready for what’s next?

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Markets Tumble as Tariff Shock Sparks Global Selloff

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Global stock markets suffered a steep crash today after President Donald Trump announced sweeping new tariffs, triggering one of the worst trading days in years.

Major Index Losses

  • Dow Jones Industrial Average plummeted 4%, shedding 1,680 points — its steepest single-day drop since 2020.
  • S&P 500 sank 4.8%, approaching correction territory.
  • Nasdaq Composite plunged 6%, officially entering correction territory with a 16.8% decline from its December peak.

Sector-Wide Selloff

  • Tech stocks led the rout:
    • Apple fell 9.3%
    • Amazon dropped 9.04%
    • Nvidia slid 7.78%
  • Retail stocks were hammered due to tariff exposure:
    • Restoration Hardware collapsed 40.1%
    • Nike fell 14.4%
    • Target declined 10.8%
  • Financials took a major hit as recession fears surged:
    • Bank of America dropped 11.1%
    • American Express fell 9.9%

Technical Analysis of S&P 500

The S&P 500 closed today at 5397, landing precisely on our previously identified support level (green horizontal line). The next 24 hours will be critical — if this level holds, we could see a short-term relief rally. However, the path of least resistance remains lower, with the next significant support zone down at 5245 (yellow horizontal line).

Markets absolutely hate uncertainty, and in this case, Trump’s tariff announcement has likely increased it, not reduced it. Some reasons why?

Mixed Signals

While the tariffs were announced with strong rhetoric, Trump also said he’s open to negotiation. That creates ambiguity. Are the tariffs a firm policy? A bargaining chip? A first move in a longer game? Investors don’t know — and uncertainty leads to risk-off behavior.

Potential for Escalation

Other nations might retaliate, which could trigger a full-blown trade war. The market is pricing in not just what has happened, but what could spiral out from it.

Timing Matters

Markets were already jittery — the Nasdaq had already been sliding — and this announcement poured gasoline on a smoldering fire. Investors are now grappling with the possibility of higher inflation, slower global trade, and a potential recession.

We do not have a crystal ball, nor does anyone else. That is why we rely on the charts and our models. We use technical analysis to tell us the most likely support and resistance levels and right now, we’re sitting at the first major test. If 5397 breaks down decisively, we’re looking to the next key support level at 5245 for signs of stabilization.

Gold surged to an all-time high earlier in the session, fueled by safe-haven demand in response to President Trump’s aggressive tariff announcement. But as the session wore on, many investors took profits, prompting a reversal in prices after the sharp rally.

Selling the Baby with the Bathwater

The broader market meltdown triggered margin calls and liquidity stress for leveraged investors. In such scenarios, gold — being one of the most liquid assets — is often sold to cover losses elsewhere. This forced selling contributed to gold’s intraday decline.

While gold usually benefits from economic and geopolitical uncertainty, today’s pullback appears to be more about short-term volatility than any fundamental shift in sentiment. We continue to view gold as structurally strong and expect it to remain resilient in the coming months.

Technical View

From a technical standpoint, we’re watching for gold to retest the upper boundary of its uptrend channel (red diagonal line) — a former resistance level that now serves as support. It’s likely gold will test this level multiple times, and if it eventually breaks below, we’ll be watching for the next key supports at $3,000 (green horizontal line) and then $2,950 (yellow horizontal line).

Oil prices tumbled sharply today, driven by a combination of demand concerns and unexpected supply increases — creating a ‘double whammy’ for energy markets.

  1. Recession Fears Fueled by Tariffs

Trump’s sweeping new tariffs have stoked fears of a global economic slowdown. A weaker global economy typically leads to reduced energy consumption, placing downward pressure on oil demand.

  1. Surprise OPEC+ Production Hike

OPEC+ added fuel to the selloff by announcing a larger-than-expected output increase of 411,000 barrels per day starting in May. The move caught markets off guard and raised concerns about a potential supply glut.

  1. Rising U.S. Crude Inventories

The Energy Information Administration reported a 6.2 million barrel rise in U.S. crude inventories last week — a sign of weaker domestic demand that further weighed on market sentiment.

Technical View for Oil

Oil closed the day at $66.95, sitting directly at its previously established strong support level (green horizontal line). This marks the seventh time oil has tested this support. With each additional test, the likelihood of this support level breaking increases, as repeated testing tends to weaken the strength of a support zone over time.

Navigate Market Volatility with Confidence

In times like these, uncertainty brings both risk and opportunity. That’s why making smart, informed decisions is more critical than ever.

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Evaluating Greenland’s Role in a Tight Global Uranium Market

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Investors fearing that uranium mining in Greenland might depress market prices should consider several critical factors, including the current global supply shortfall, and an expanding supply-demand gap,

Addressing Investor Concerns About Greenland’s Uranium Impact on Prices

Current Uranium Market Dynamics

The uranium market is grappling with a pronounced supply deficit. In 2024, production reached only 89% of the global reactor requirement, leaving a substantial shortfall. Additionally, secondary supplies—which have traditionally filled the gap—are vanishing quickly, with commercial inventories falling from 65 million pounds in 2021 to just 17.5 million pounds in 2024. Notably, 2024 was expected to mark the last year when these secondary reserves offer any significant support.

Growing Supply-Demand Gap

This shortage is poised to worsen over the coming decade. Paladin Energy forecasts an annual deficit exceeding 50 million pounds of uranium, emphasizing the deepening imbalance between supply and demand. Utility companies, in response, are increasingly committing to long-term contracts, a clear indicator of their concerns about future supply shortages.

Reasons to Invest in Nuclear Energy

Long-term investments in nuclear energy continue to be attractive for several key reasons:

  • Stable and Reliable: Nuclear plants operate 24/7, ensuring a continuous and dependable power supply irrespective of weather conditions.
  • Low Greenhouse Gas Emissions: With a carbon footprint between 15 and 50 grams of CO₂ per kilowatt-hour, nuclear energy is a much cleaner alternative to fossil fuels, currently preventing about 1.5 gigatonnes of global emissions each year.
  • Growing Public Support: Global sentiment toward nuclear energy is on the rise, with even environmental advocates increasingly in its favor—an encouraging sign for future projects.
  • International Commitment: At COP28, more than 20 countries, including Canada, the US, France, and the UK, endorsed the Declaration to Triple Nuclear Energy, underscoring strong governmental backing for nuclear expansion.
  • Significant Growth Potential: With 440 operational nuclear plants worldwide, tripling capacity would require 1,320 reactors. Given that 65 reactors are under construction and 110 are planned, an additional 1,145 reactors would be needed to reach this goal—even halving the target would necessitate 570 new reactors. Such an expansion would dramatically boost uranium demand.
  • Economic Benefits: Studies suggest that investments in nuclear energy can spur economic growth, potentially increasing GDP by 0.2% to 3% in countries that prioritize nuclear power.

Greenland’s Uranium Potential and Challenges

Although Greenland is known to possess significant uranium reserves, several obstacles hinder any near-term market impact:

  • Political and Regulatory Hurdles: A 2021 ban by Greenland’s government prohibits uranium exploitation above 100 ppm, posing a formidable barrier.
  • Environmental Concerns: Local opposition driven by environmental and community interests has led to stringent restrictions on uranium mining.
  • Extended Development Timeline: Even if these challenges were overcome, new mining operations in Greenland would likely require many years—possibly a decade or more—to become operational.

Market Implications for Investors

Considering the current market conditions, several key implications emerge for investors:

  • Persisting Supply Deficit: The ongoing and projected shortages indicate that uranium prices are more likely to rise in the near to medium term.
  • Limited Short-Term Impact from Greenland: Given the regulatory and developmental challenges, Greenland’s uranium reserves are unlikely to affect the market significantly in the short run.
  • Surging Demand: With over 60 new reactors under construction globally and increasing support for nuclear energy, demand for uranium is set to grow substantially.
  • Importance of Diversification: Recent geopolitical shifts underline the necessity of diversified supply sources to ensure long-term energy security.

Conclusion

Investors concerned that Greenland’s potential uranium production might lower prices should instead consider the current severe supply deficit, the rapid depletion of secondary reserves, and the forecasted surge in global demand. With ambitious international plans to expand nuclear capacity and a pressing need for new reactor construction, additional uranium supply—even from Greenland—will likely be absorbed by the market, thereby supporting, rather than reducing, uranium prices. New sources of uranium will be crucial in meeting the growing global demand for nuclear fuel.

Election Month Market Moves: Setting the Stage for 2025

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November 2024 brought a whirlwind of market activity following the Trump election, with standout performances setting the tone for what could be the next big trading themes. Here’s a condensed look back—and some thoughts moving forward.

Market Highlights Post-Election

  • Explosive Gains: Ethereum (+49%), Bitcoin (+42%), natural gas (+26%), cloud storage (SKYY) (+17%),  broker-dealers (IAI) (+16%), and software (IGV) (+15%), stole the show.

  • Broad Rally: Oil and gas (XOP), financials (XLF), the Russell 2000 (+11%), and internet stocks (FDN) (+10%) showed strong follow-through.

  • Trading Targets: These sectors could lead the next wave of performance—we want to keep an eye on the frontrunners.

Trump-Era Market Signals

  • VIX Decline: A drop from $23 to $13.70 eased market fears, clearing the way for equity gains.

  •  Sector Laggards: Cannabis stocks (MSOS, -37%) and solar energy (TAN, -9%) faced heavy losses amid Trump’s pro-energy, anti-renewables stance.

Key Risks and Observations

  • Semiconductors are a source of concern: Semi ETF  SMH up 50% YTD but was down ~9% in November.

The Playbook

  • Trump Trade Momentum: Bitcoin (IBIT), software (IGV), S&P 500 (SPY), financials (XLF), broker-dealers (IAI), cloud storage (SKYY), and consumer discretionary stocks are leaders who we need to keep watching.
  • Tactical Approach: Wait for pullbacks, manage risk, and position for continued strength into 2025.

The market has identified its current leaders. As the Santa Claus rally approaches, expect continued momentum, but post-inauguration, market euphoria may cool off. That pull back could present a good buying opportunity.

Stay tuned!

Week ending November 1, 2024: Key Market Highlights

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The S&P 500 drop: Key points on the chart are the breaking of the ‘rising wedge’ pattern (red & green dashed lines), and the testing of the 50-DMA (blue line). The 100-DMA (red wavy line) at 5592  would be the next key technical support level.

Volatility Risk: The past 12 months have delivered some of the strongest risk-adjusted returns in market history. However, volatility is now on the rise, driven by the increasing likelihood of a fiercely contested presidential election. In today’s polarized political landscape, this is far from a remote possibility.

Election Showdown: One way to gauge market sentiment on the US election outcome is by tracking the action on Trump’s media stock. From May to late September, investors were unloading the stock. Then, momentum shifted dramatically as buying surged—only to taper off about a week ago. This pattern suggests a razor-thin race, with Harris picking up momentum as election day approaches.

Investor optimism hits record high: The Conference Board surveys respondents on whether they believe stocks will rise or fall, and the current bullish sentiment has reached its highest level since the survey’s inception in 1986. What could go wrong?

Oil prices spike with escalating tensions: Oil prices climbed at the week’s end, fueled by rising tensions in the Middle East. Reports suggesting that Iran might be preparing a major attack on Israel have sparked concerns over potential disruptions to the region’s oil supply.

Market insights: The biggest relief about the US election may simply be that it will eventually conclude. Yet, the process could stretch for weeks, with disputes over vote counts and tactics adding to potential chaos. While we don’t anticipate a lasting impact on the market, the uncertainty is likely to drive short-term volatility and speculative losses. The best ‘election trade’ might be patience: staying focused on long-term fundamentals rather than getting swept up in the noise. In time, the distraction will fade, and attention will shift back to what truly matters.

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This Week’s Key Market Highlights:

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October 25, 2024:

The S&P 500 dip:  The first weekly decline after six gains suggests a potential bounce next week, though election volatility could bring market jitters, especially if results are delayed.

US Election Countdown: With just 10 days until the election, markets leaning toward a Trump victory due to his pro-deregulation stance, seen as favorable for business.

Rising Bond Yields: Concerns about persistent inflation are pushing bond yields higher, limiting room for Fed rate cuts. The Bank of Canada cut rates by 50 bps to 3.75%, and the ECB by 25 bps to 3.4%, contrasting with the Fed’s 5%.

Rising Mortgage Rates: Contrary to expectations, mortgage rates are rising, tracking higher bond yields despite the Fed’s September rate cut.

US Dollar Surge: Up 4% since late September, the dollar’s strength reflects robust US economic data, solidifying it as the “least ugly” currency in uncertain times.

Canadian Dollar Weakness: As the Bank of Canada cuts more aggressively, the loonie falters amid Canada’s weaker economic outlook.

Homebuilder Setbacks: Rising mortgage rates weigh on homebuilder stocks.

Gold Near Highs: Gold is nearing new highs with its RSI around 70 (bottom of chart), signaling potential overbought conditions and a possible pullback.

Market Insights: Bullish trends continue, but election uncertainty looms. A clear election outcome may trigger a ‘sell the fact’ reaction.

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Why the Bond Market Fears Inflation Despite Fed Rate Cut?

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Why Retail Investors Should Pay Attention to the Bond Market

Many retail investors overlook the bond market, dismissing it as too complex or less exciting than stocks. However, bonds hold the key to understanding broader economic trends, especially interest rate movements. Ignoring them means missing out on critical insights that could enhance your investment decisions

The Unexpected Rise in Long-Term Rates

On September 18, 2024, the US Federal Reserve announced a significant 50-basis-point rate cut, the first since July 2023. Typically, rate cuts are designed to lower borrowing costs, leading to a drop in bond yields. However, this time, the opposite happened—interest rates on 10-year bonds went up, not down. So, why are these longer-term rates rising?

The impact was also felt in the real estate sector. The 30-year US mortgage rate jumped back to 6.69%, a surprise to many who expected lower mortgage rates following the Fed’s rate cut. This spike has left homeowners and real estate professionals rethinking their expectations.

Why Inflation Expectations Are Rising

To understand why bond yields and mortgage rates are rising, we need to look at the underlying factors driving these movements. One major reason is long-term inflation expectations. While the Fed may believe inflation is under control, the bond market seems to think otherwise. One of the key reasons why is related to soaring government deficits:

  1. Reckless Government Spending: The US government’s increasing debt levels mean more bonds are issued, leading to a flood of new supply.
  2. Replacing Maturing Bonds: New bonds must be issued to replace those that are maturing, adding more supply.
  3. Funding New Debt: Continued high levels of government spending require new bonds to finance the debt, driving yields higher as investors demand more to take on increased risk.

Since the debt ceiling was suspended on June 2, 2023, the US has added a whopping $4.3 trillion to its debt total, with national debt fast approaching $36 trillion. To put it into perspective, the $600 billion increase over the last two months is nearly three times the annual budget of NASA.

Navigating the Current Investment Landscape

Clearly, the bond market is sending a warning signal: inflation is not as controlled as we might like to believe, and expectations are that it will continue to rise. As inflation erodes the purchasing power of the dollar, many investors are turning to alternative assets like gold and Bitcoin.  Gold closed at a new all-time high today.

These assets offer a limited supply, making them less susceptible to devaluation. Unlike paper dollars, governments cannot print new gold or bitcoins out of thin air, which is why they remain popular as inflation hedges.

 Why You Should Stay Informed

Our team at the Trend Letter has been monitoring these developments closely. We’ve been publishing insights for over 22 years, helping our subscribers stay ahead of market shifts with timely alerts and data-driven analysis. Our models have consistently alerted us to key changes in the market, and our current portfolio is up 39% this year.

We provide our subscribers with weekly reports every Sunday evening, covering all major sectors, key events and trends to watch, including:

  • The effects on the markets of the upcoming US election
  • Central bank actions
  • Inflation trends
  • Potential recession risks
  • Seasonal market movements

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Stay tuned!

This Week’s Trends & Market Highlights

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October 18, 2024 Key Market Highlights This Week:

Gold reaches a new all-time high despite rising interest rates and a stronger U.S. dollar, driven by surging national debt.

The S&P 500 breaks through to a new record high, signaling strong market momentum.

Uranium stocks ratchet higher, fueled by increasing demand for energy, especially from AI data centers.

Semiconductors roaring  back, with Nvidia testing new all-time highs.

Market Insights: We’re witnessing a broad-based bull market across multiple sectors, even as bond yields rise and economic indicators fluctuate. Look out for a comprehensive update in this Sunday’s issue of the Trend Letter.

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This Week in Money Interview

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Martin did his monthly interview with Jim Goddard on the This Week in Money show. Topics discussed were:

  • Stock market trends
  • Gold coming into seasonal strength
  • Have geopolitical events been priced into oil?
  • Why has the $US been rising, especially given the Fed just made a deep rate cut?
  • The Fed says its not worried about inflation anymore, should they be?
  • There is a lot of mainstream media talk about a Soft vs Hard landing. What does it mean and how should investors prepare for either scenario?
  • The Fed cut rate 50-bps, and now the long bond yields are rising, which seems counterintuitive. Why is that happening?
  • The Shanghai stock exchange had wild swings in the past week, what is happening there?
The other guests on the show—Ross Clark, Victor Adair, and Josef Schachter also offer sharp perspectives on the current market landscape. Tune in!

Click here to listen.

“Fueling Success: Exploring Explosive Investment Opportunities in Energy”

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Martin re-recorded his presentation from the World Outlook Financial Conference in Vancouver on February 2/3, 2024. In the presentation he outlines key energy sources and gives 12 stocks for investors to consider in the natural gas, uranium, and oil sectors.