Well, the commodity pullback has occurred with crude coming down to $122.5/barrel (remember my prediction back in June of a pullback to that $122 level!) with the test of the $120 level coming soon. What happens after that, who knows but with volatility coming in I think a lower trading range is in order for oil, gold and the grains.

Any of the grains can be bought here with beans below 14, corn below 6, and wheat below 8. This is a major pullback in the grains, some 15% off their highs, and gold has pulled back around 6% from its recent highs. With oil off 15% from its highs around $147/barrel, you have to think that this pullback is near the end. Some consolidation should occur in all these commodities here as bond yields have jumped and the stock market has rallied 3-4% off the bottom. Natural gas is around 9 now after peaking out around 12.5.

So if you haven’t been involved in commodities this year, well, this is an excellent entry point. You won’t hear congress flapping their gums about the evil speculators anymore. Funny how that works. The banking system is still quite shaky and mortgages are difficult to get unless you have perfect credit. I have heard anecdotal evidence that unless you are willing to put 20-40% down, then you better prepare for a big hassle.