Today we walk through the Alternatives view on the Asset Class Group Scores page.
Remember, these are technical comments only. Just as you must be aware of fundamental data for the stocks we recommend based on technical criteria in the report, so too must you be aware of important data regarding delivery, market moving government releases, and other factors that may influence commodity pricing. We try to limit our technical comments to the most actively traded contracts in advance of delivery, but some contracts trade actively right up to delivery while others taper off well in advance. Be sure you check your dates before trading these contracts. For questions regarding this section or additional coverage of commodities email will.gibson@nasdaq.com.
Data represented in the table below is through 3/28/2023:
Broad Market Commodities Report
Portfolio View - Commodity Indices
| Symbol | Name | Price | PnF Trend | RS Signal | RS Col. | 200 Day MA | Weekly Mom |
|---|---|---|---|---|---|---|---|
| CL/ | Crude Oil Continuous | 73.20 | Negative | Buy | O | 85.83 | -3W |
| DBLCIX | Deutsche Bank Liquid Commodities Index | 491.22 | Negative | Sell | O | 529.36 | -3W |
| DWACOMMOD | DWA Continuous Commodity Index | 767.49 | Positive | Buy | O | 804.85 | +1W |
| GC/ | Gold Continuous | 1973.50 | Positive | Sell | X | 1782.40 | +3W |
| HG/ | Copper Continuous | 4.08 | Negative | Sell | X | 3.77 | +1W |
| ZG/ | Corn (Electronic Day Session) Continuous | 647.25 | Negative | Buy | O | 663.83 | -6W |
Markets continued to chop over the past week, leaving our technical indicators largely unchanged.
On the Asset Class Group Score page, we still find Precious Metals atop the Alternatives view followed by MLPs (despite a strongly negative score direction). Precious Metals has been buoyed by recent price strength from gold and silver, and perhaps qualitatively by economic fears/uncertainties.
On the other end of the spectrum, we find real estate with an average group score of just 1.35. Note that many of the underlying funds target REIT exposure. REITs have generally experienced a positive correlation to interest rates over the past 20 years, except during Fed tightening cycles. There are different schools of thought as to why this is the case, but rising rates typically coincide with a growing economy, which also (often) brings rising real asset prices. However, if rates rise too quickly or surpass expectations (like in the current state) and investors’ concerns about a recession overpower, then some may abandon their real estate yield plays for safer income streams. The real estate group is currently trading in heavily oversold territory, evidenced by a % OBOS (overbought/oversold) reading of -101%, so there is elevated potential for a near-term bounce. That said, should this bounce take place, it would be seen as a sell on rally opportunity given the longer-term score rankings.
It's worth mentioning that the US Money Market group carries a score of 2.98, which is just shy of the 3.0 demarcation line and overtaking Agriculture. Agriculture was also recently surpassed by Industrial Metals on our sub-asset class rankings on DALI, further highlighting recent weakness.
With only two groups carrying average fund scores above 4.0 and six with positive score directions, it is fair to say that leadership within the alternative assets space is narrow(ing).
