The commodity basket to S&P ratio just formed a textbook double-bottom. The ratio also has a very similar momentum setup to the peak of the Dot.Com Bubble on both the RSI and 7 yr Rate of Change indicators. We look to be starting a true secular bull market in real assets that could be sustained throughout the decade.
The chart shows that financial assets have rarely been more overvalued compared to real assets. If looser monetary and fiscal policy is not maintained, equities do not have a rosy near-term outlook.
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