Buy gold, sell energy and buy cotton. That’s Oppenheimer Chief Market Technician Carter Worth’s commodities playbook for a volatile tape.
With oil futures settling above $100 for the first time ever, Worth said it is as good a time as any to sell crude. That “sell the rally” attitude stems from his theory that when any asset moves quickly through its range (in oil’s case, it has been trading between $85 and $100 for several months), history shows that it tends to get stuck at the top of the range instead of breaking out higher.
As for the trend in other commodities, Worth recommended buying the gold miners which he expects will catch up with the huge run in gold. As he anticipates crude oil will stick around $100, he thinks the energy stocks will ultimately disappoint as well.
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