Tags: Charts | fundamentals | commodities | recovery

The Charts Show an Economic Recovery Under Way

By    |   Monday, 13 August 2012 08:16 AM

There’s a reason why I prefer charts over fundamentals. It’s not that I don’t believe in fundamentals. I use them in most every issue of my Ultimate Wealth Report for my subscribers. So, obviously I believe in them.

However, charts can give you a tip off as to what’s happening now, which the fundamental data will only pick up on about three months later when the quarterly data begin to reflect it.

But if you wait to invest three months later, you will have missed a good bit of the gains. Therefore, I like looking at commodity charts to see when the global economy is turning around.

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After all, when countries are growing more, they’re producing and consuming more commodities, and when things are getting worse, they are using less of them.

So, when commodities are heading south, you can be sure that the global economy is doing the same. However, when commodities begin to find a floor and trade sideways, you get a heads up that a change is likely taking place economically.

Then, when these commodities begin to trend higher even the least little bit from the sideways base it built on the chart, you know that at least a mini-recovery is under way.

Well, one of these mini-recoveries is what is happening right now. We see it in the Commodity Research Bureau (CRB) Index heading higher. We see it in the stabilizing of the price of copper. We see it as steel has firmed up and bounced off of its lows, etc.

The economic data will begin to show this over the next quarterly gross domestic product announcement or two. But we’re aware of it right now because commodities are actually telling us it is going on right now.

That’s why we bought commodity-related stocks when we did in the Ultimate Wealth Report portfolio. Some people may have thought we were crazy for buying these assets when we did. But all of the positions are profitable. Not only are they profitable, but they are outpacing the Standard & Poor’s 500 Index by a wide margin.

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So, do like we’re doing at Ultimate Wealth Report and look for good solid commodities and commodity-related stocks to buy during these mini-recoveries. You’ve got to buy them when no one else wants them and when no one else thinks things are turning around. That’s why you’ve got to listen to what the charts tell you and not simply wait for the GDP data to come out three months down the road.

About the Author: Sean Hyman
Sean Hyman is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of Ultimate Wealth Report. Discover more by Clicking Here Now.

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Monday, 13 August 2012 08:16 AM
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