VRA Alert: Make Sure You are Positioned - Major Cycle Reversal

Corporate earnings are coming in, and the early read for me is “surprisingly solid”. And remember folks, this is the quarter where a combination of bad weather and a strong US Dollar (USD) were supposed to hit companies and hit them hard.

There is one area where hits from a strong USD have been felt. Take a look at the following commodities since their 2011 highs…

Commodity 

Current Price

Recent High

Change

Iron Ore

$59.00

$195.00

-70%

Silver

$15.53

$48.55

-68%

WTI Crude

$44.88

$113.39

-60%

Corn

$358.50

$839.50

-57%

Natural Gas

$2.69

$6.21

-57%

Brent Crude

$55.24

$126.26

-56%

Hogs

$65.21

$133.06

-51%

Soy Beans

$962.00

$1,790.00

-46%

Uranium

$39.25

$73.00

-46%

Wheat

$504.50

$912.50

-45%

Copper

$5,882.00

$10,064.00

-42%

Platinum

$1,121.00

$1,884.00

-40%

Gold

$1,153.57

$1,874.72

-38%

Southern Pine Trees

$395.00

$499.00

-21%

Source: Thomson Reuters Datastream

What a “Falling” Dollar Could Mean for Commodities

Since July 2014, the value of the U.S. dollar has risen more than 25%. That's an incredible move for any currency. The rapidly rising dollar sent commodity prices falling just as fast...

The chart below shows the inverse relationship between the Reuters/Jefferies CRB Index (that tracks 19 commodities) and the dollar. Since many commodities are denominated in dollars, the price of those commodities has fallen as the dollar has gained strength.

As I’ve written extensively, I am looking for a major move higher in precious metals…and we are well positioned here with our current positions. Remember, gold shorts are at an all time high.....Euro Shorts/Dollar Longs are at an all time high. NOW is the time to be positioned as a perfect storm short squeeze develops.The chart above is going to reverse completely.

And...for all of you that have bought into the argument that precious metals prices will fall in the face of rising interest rates, think back to the late 1970's, and more recently, the 2002-2005 time frame. Gold and silver skyrocketed as interest rates increased...this time would be no different.

While it’s too early that say that the move higher in the USD is over, its not too early to take action on companies that will benefit greatly from a weaker dollar.

Make sure you are positioned accordingly...

VRA Subscribers just booked another 112% profit today. Incredibly, close to 70% of the public wants nothing to do with the stock market. Of course, after the Dow Jones has jumped another 30%, they will all be jumping in...and that's when we will be selling.

Kip Herriage - VRAletter.com

@kherriage (Follow me on Twitter)