InvestIdeas

The vast under-performance of industrial metals compared to precious metals may be a warning sign regarding the strength of economic demand and/or investor skittishness.

Furthermore, if recent history is a guide, the stock market may have a difficult time defying gravity much further, as the industrial metals continue their relative deterioration.

The metal cycle goes boom and bust like the other commodities but the bust is much longer. The last commodity bust for metals took a whole generation to turn around. This is because there is a cycle that is acute for hard commodities that takes a very long time to play out.

While oil will rise further and gold looks like it has seen its lows, significant upside for the other metals is not favorable until further notice.

Among the precious metals, gold rallied 23% off its low… Silver rallied 27%off its low… And platinum rallied 33%.

In energy, natural gas rallied 60% and crude oil rallied 96%.

Among agricultural commodities, soybeans rallied 36%… Coffee rallied 26%… And corn rallied 25%. Sugar prices are up 90% from their August low.

By most common definitions, all of the commodities above are now in bull markets.

The U.S. Commodity Index Fund (NYSE Arca: USCI) is a unique exchange-traded fund product. USCI tracks the SummerHaven Dynamic Commodity Index, which looks for "opportunities" in commodity prices.

Essentially, the way it works is the index buys the seven commodities that exhibit the greatest "backwardation," which basically means buying futures contracts that sell for less than the current month's contract. Then it buys the next seven commodities that have the strongest 12-month price change.

Stocks and real estate have boomed. Commodities haven’t.

Their time is now. Take advantage of it…