Are raw materials in a speculative bubble?

[Pmolemva]

YES, NO, WHY YES? Trump’s rise perhaps? Expectations of economic growth are inflated. Quant Trader - My blog: quantstop.blogspot (point

[jesules1990]

Most raw materials are far from their peaks, so why think of a bubble? If the dollar collapses, we may see higher prices, but right now there is plenty of supply in most commodities.

[Anvalbe]

Hello, just out of curiosity, what program do you use to make such good raw material graphics? They are very well done. No, especially because a weaker dollar could lengthen the bullish cycle of raw materials.

[Pmolemva]

Trump's rally inflated prices, driven by pure speculation. Quant Trader - My blog: quantstop.blogspot (point

[JuangeSanlana]

Could you mention one or two commodity prices inflated by speculators? Mm-hmm. I think I missed the ones you're seeing.

[Lixxo1910]

http://finviz.com/futures_charts.ashx?t=ENERGY&p=m1

[cascavel]

Hello, thank you very much for the info. Very useful!

[jeans654]

The raw materials are in the bearish cycle, but everything points to a shift towards a long-term upward trend. It only takes a clear trigger, and you will see the stock market collapse. Never bet on forex.

[Pmolemva]

I have here a simple model on crude that uses three macroeconomic variables: OPEC production Labour market health (Non-Agricultural Nominations)

[Abelamgo]

Bubble? Please. If this is a bubble, the 2017 Bitcoin was a soap bubble.

[Pmolemva]

I am not saying that they are all inflated, but there are clear speculative patterns in certain sectors such as energy and industrial metals.

[mililiho]

And what do you think of copper? Because that one has gone up endlessly and a lot of funds are pushing it.

[Pmolemva]

Copper is overbought according to several technical indicators, but until there is fundamental confirmation of deceleration, it will remain high.

[GagaCano]

To say that raw materials are bubbled without context is like saying that it will rain without looking at the sky.

[Pmolemva]

The context is important, of course. That is why I published this thread, to open debate with arguments, not with phrases made.

[Wasikoky]

Do you really think speculators have that much power?

[Pmolemva]

Have you seen what happened to oil in 2020? Of course they have power. When there is little regulation, speculation rules.

[Lulul]

I only see an accelerated post-pandemia recovery, not a bubble.

[Pmolemva]

That recovery is not reflected in the real demand for raw materials. There is a worrying gap.

[Camlllsk8love]

Do you use inventory data for your crude oil model? Because that could fine-tune your conclusion.

[Pmolemva]

Yes, but only as a secondary variable. The price reaction to inventories is already usually discounted.

[SanliMG]

You have a blog, but you look more like a bar talkout. Where are your papers?

[Pmolemva]

I don't write papers, I operate markets, but if you want to argue based, go ahead.

[gmgomwzji]

Don't you think inflation is more likely to be behind high prices than a bubble?

[Pmolemva]

Inflation pushes, but when the price goes up faster than accumulated inflation, that's bubble.

[Baynlxi]

Excellent contribution. I would like to see more models of yours, especially with other assets such as gold or natural gas.

[Pmolemva]

Thank you, I'm preparing it. I'm adjusting a gold model that includes correlations with real interest rates.

[ZOOL]

Look at the lithium, it went up 300% in a year. Is that normal?

[Pmolemva]

Exactly, lithium is another good example of speculative distortion. Real demand does not justify such growth.

[gaynina]

Bubbles or not, the important thing is to get in the wave and know when to jump before it breaks.

[Pmolemva]

Yeah, but identifying the breaking point is the complicated thing, which is why I analyze the macro data.

[maulcaslle]

And don't you think the massive fiscal stimulus was the real catalyst?

[Pmolemva]

Of course. Excessive liquidity needs to be used, and many funds were turned to commodities.

[jjgp59]

Your crude model sounds interesting, but without seeing the code I can't trust it at all.

[Pmolemva]

I understand, but I don't publish it completely for rights. I can share snippets if you're interested.

[jesusgamcay]

I just came to say that the wheat is not in bubbles. I live out of that and believe me, there is no party.

[Pmolemva]

That's why I say some raw materials, not all.Wheat is more stable for now.

[akma660]

The bubble is more in stocks than in raw materials.

[Pmolemva]

Many raw materials follow the sectors that use them the most.

[homoibemikus66]

I don't see bubble, I see adjustment, we come from years of depressed prices.

[Pmolemva]

Yes, but a rational adjustment does not generate 50% increases in weeks without physical backup.

[Maulmggz8]

Your model convinced me more than a thousand headlines. Have you considered including geopolitics?

[Pmolemva]

Yes, this is the next phase, especially with issues such as regional conflicts and sanctions.

[Lomenanila]

In the end, bubble or not, if you don't handle the risk well they eat you alive.

[Pmolemva]

Totally agree. Risk management always goes first, even above analysis.

[Gayginab]

Reminds me of 2008 when the oil went up to $147 and then dropped to $33. Déjà vu?

[Pmolemva]

That's why you have to be alert. Patterns are repeated, even if the context changes.

[MacsoGamem]

And what do you think of gold, too, overrated?

[Pmolemva]

Gold is more complex. Its value depends more on monetary factors than on direct supply-demand.

[mociobelela]

Where did you study economics, because you seem to know how to argue.

[Pmolemva]

Thank you, I studied Quantitative Finance, but what he taught me most was to operate with real money.