As the markets climb the
Ukrainian wall of worry this seemed like a good time to review how our old commodities model was holding up. In this case we look at the weekly model going back 7 years and the results are clearly better than SPY from a variety of perspectives.
Note the severe drawdown periods in 08 and 10....following the simple P6 equity curve stop would have avoided a temporary 20% drawdown in each case.
This main driver for much of these gains has been UNG (natural gas), the same driver that provided the gains in the M# energy model posted last week.....this is just a longer term look using a wider field of commodities than just energy.
Next likely rotation is into DBA, the agriculture sector, which has already seen some spectacular gains recently.
With the VIX rising 15% today and the XIV crumbling 7% we're beginning to see a return to the VIX/XIV pair skew that has been out of balance for a while. Nothing like a good market shakeout to set things straight. Here's the view from Adam Warner on the situation:
