Oil fell to its lowest level in nearly three months on Tuesday, extending a steep slide since mid-July on mounting evidence high prices and a souring economy are cutting into world energy demand.
The drop coincided with a firmer U.S. dollar, which may have reduced the appeal of commodities to some investors playing the strong negative correlation between the markets in recent months, analysts said.
What’s next for commodities? For insights we turn to esteemed investor Dennis Gartman, author of The Gartman Letter.
“Those who are long are throwing up all over their shoes,” says Gartman on Fast Money, “and those who are short are feeling like the kings of commodities. I see no reason for that to change.”
"Gold looks awful,” says Gartman. “It should have run like a scalded dog and it didn’t. It had all the news it needed to move higher and it didn’t.”
“It looks to me like a trend change,” says Gartman. “It should have tanked and it held. I think gold and the dollar are changing their major trend.”
How are you trading?
”I’m short a little crude oil but not aggressively,” replies Gartman. “I guess the trade is to buy the dollar.”
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Trader disclosure: On July 29, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (DIS), (MSFT), (WMT), (COST); Adami Owns (GS), ( C), (NUE), (MSFT), (AGU), (INTC), (BTU); Adami's Wife Works At Schering-Plough; Najarian Owns (TSO); Najarian Owns (WMT) Calls, (XLY) Calls; Najarian Owns (AAPL) Puts and stock; Finerman And Finerman's Firm Owns C; Finerman's Firm Owns (MRK), (GS), (VLO), (TSO), (MSFT), (SUN)