The commodity rally is overcrowded and vulnerable.

 

“The charts, as interpreted by Carley Garner, suggest that the recent commodities boom is not long for the world. She says we could still see some short-term upside … but longer-term, she thinks this bull is about to get slaughtered." - Jim Cramer, Mad Money Host

 

Commodity rallies have proven to be unsustainable. Can this time be different?

There is a saying in finance; “Don’t confuse genius with a bull market”. The massive commodity rally in recent years has likely resulted in overconfidence and complacency regarding the long commodity trade. We’ve seen this movie before; the ending is somewhat tragic for those that adopt the mantra “this time is different”. Commodity bull market narratives are always compelling, frightening, and overwhelming; they are also temporary.

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