After years of underperforming stocks, commodities are beating the S&P 500 this year, at least as measured by the Dow Jones Commodity Index. But some traders still advise staying far away from the commodity space.
The recent move higher is "definitely a head fake," Boris Schlossberg of BK Asset Management said Monday on CNBC's "Power Lunch."
The biggest problem, he said, is that little has changed. Most commodities have slid due to strong supply and disappointing demand, and these fundamental factors remain intact.
"When you look at commodities, the only time you get V-shaped moves is when you have supply disruptions, and we really haven't had any supply disruptions or any kind of supply dislocations," said Schlossberg.
Instead, the rise has been driven by "a massive amount of short covering."
While he says this short covering was indeed overdue, it doesn't exactly give him a reason to get long commodities now.
"When push comes to shove, there's just no juice there. There's no consumer demand at the end of the rally, and it's probably going to drift back down as we go further into the summertime."
Goldman Sachs' commodities research team made a similar point in a big Monday note.
"Market views on reflation, realignment and re-levering have driven a premature surge in commodity prices we believe are not sustainable," the team led by Jeffrey Currie wrote.