Morning Note: Is Commodity Bubble About to Burst?

Commodities have had a strong run, but is the global economy (read: China) strong enough to support continued gains?

Signs of a commodities top have cropped up that have some Fast Money traders alarmed.

Take, for instance, reports yesterday that Nomura, Japan's largest brokerage, is cutting back its global commodities and energy-trading business — this as gold and silver are hitting record highs, and oil is at two-year highs. Add to that reports from China last night that it logged its deepest trade deficit in seven years amid falling export growth. China is one of the world's biggest buyers of oil, iron ore, copper and other industrial materials, and the weak China import data is weighing on copper today.

"These are very early signs of a downturn in commodities," said Brian Kelly, Kanundrum Capital President said. "China is the marginal buyer, so if China is slowing, then (industrial metals) unravel," the Fast Money trader added.

Another bit of news that has commodity investors worried is the Glencore IPO, which CNBC's Kate Kelly signaled last week could be a sign of the commodities market topping out. Glencore is the world's largest commodity trader.

"When the smart guys are getting out, you have to ask yourself what's going on?" Dennis Gartman, The Gartman Letter Editor and Publisher noted. Likewise, Gartman isn't too concerned by Nomura pruning its commodity business.

"It would appear to me that at least a correction of some material consequences is taking place," he said. "Do I think it's the end of a multi-year bull run in commodities? No I don't think so," he said.

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