The CRB commodity benchmark index fell over 10% in July, marking the worst month for the index since 1980 (which, incidentally, marked the end of the last bull market).
While I believe we are only in the 4th or 5th inning of this bull market, a couple lessons come to mind:
- The easy money has been made - buying oil at $12 was a no brainer. Buying oil at $120 could burn you in the short-medium term.
- All bull markets have pull backs. Commodities took off out of the gates to begin the year, but many have since retraced and given back most or all of their gains. This has been reflected in my trading performance (up an easy 100%, then giving most of those gains back since).
My favorites right now: sugar, coffee, cotton, live cattle, lean hogs. Currently still long sugar, cotton, and live cattle.