This Hated Sector is Preparing to Turn Up
I’ve been saying for a while that commodities bottomed in the June through September period. If you look to the CRB Commodity Index, copper or even steel, you’ll see this.
At this point, the worst is over. The “bad” that is still out there has been priced into stocks. And now China’s data is turning up, which confirms the increased demand that we’re seeing on commodity charts.
Commodities turn up first and then it shows up in the data one to two quarters later. So with that in mind, let’s look at one of the most hated sectors out there: steel.
The Next Major Move is Up
As you can see from the chart of steel (through the ETF symbol SLX), steel bottomed around 2009. And now it’s completed its first major pullback from the rally back in 2009 to early 2011.
Now it appears the three-wave correction is complete and steel is holding its green support line. And more recently, the red corrective line is breaking to the upside.
Once investors see more positive Chinese data, they will find their way back to steel stocks.
Have a nice day!
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