This rally in commodities will fade
He believes the market activity, and rally in commodities, is driven by hedge-fund traders covering short bets - which involves buying commodities and shares to close out previous bets that the price will fall. This temporarily boosts prices but doesn't have a lasting effect because it doesn't signal a big change in market confidence.
On a call with reporters on Wednesday, Rossi said:
"A lot of this rally is technically driven. The hedge fund industry was very short the sector and they've seen a significant squeeze. I think this rally in commodities will fade, whether it's next week or next month I don't know."
Rossi's views chime with those of analysts at UBS. They told clients, in a note published on Tuesday, to get out of the US stock market now because the rally is about to come to an end.