In One Chart: If this ominous pattern holds, it may be time to bail stocks and load up on commodities

Over the past half-century, commodities have never been cheaper relative to equities than they are right now. And while the stock market continues to notch new highs, an eerie calm hangs over the commodity trading pits.

“With wild price swings, massive upcycles, exciting resource discoveries and extreme weather events all playing into things, there’s usually never a dull day in the sector,” writes Visual Capitalist’s Jeff Desjardins. “That being said, it’s hard to remember a more lackluster period for commodities than in the last couple of years.”

This chart from Incrementum AG suggests it won’t last:

As you can see, the divergence is certainly reaching historic levels thanks to a 200%-plus move on the S&P SPX, +0.64% since the 2009 crisis compared with a 31% decline for the Goldman Sachs Commodity Index over the same period.

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