Phase I was the super cycle period from 2003 until June of 2008. The market hit an extreme based on strong emerging market demand and under supply from a lack of investments in the 1990's. This came to an abrupt stop with the Great Recession.
Phase II was the Great Recession period which hit trade flows very hard. An overbought market and a major recession caused a massive overshoot on the downside in commodities.
Phase II was the reversal period which matched some of the gains in stock markets as economies started to recover. The combination of quantitative easing and a pick-up in growth created a nice rally in commodities. The rally never got to the old highs since the recovery around the world was not as strong as expected.
Phase IV was the link between commodities and the reality that economic growth rates will be lower than in the early 2000's. Global growth is lower. Emerging market growth will be positive but still lower than before. Developed market growth is anemic. Oversupply from investments in energy and mining is having an effect on prices. The result has been a price decline in line with the real economy.
Phase V --- ???? The markets may be more micro driven on the fundamentals of supply and demand. We can expect the index to be range bound with some markets having large up or down moves. If growth exceeds expectations, there will be a commodity rally.
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