Jeffrey Gundlach is bullish on commodities.

“We’re right at that level where in the past you would’ve wanted commodities instead of stocks,” said the chief executive of DoubleLine Capital on a webcast Tuesday.

Gundlach’s view is based on the historical relationship between the relative returns on the S&P GSCI commodity index and the S&P 500. Commodities are now at historically low levels compared to equity returns.

Prior low points for commodities were the early 1970s before the oil crisis took commodities up to a relative high in 1973 and 1974, and the late 1990s during the dot.com bubble, with commodities running up to a peak before the global financial crisis hit in 2008.

The turning points have been consistent, Gundlach said, and the scale of outperformance is “enormous,” with the in-favor asset class outperforming by a factor of eight or nine times before the cycle turns.

“The fascinating thing about where we are today is that the [commodity trend] line is no longer moving down” relative to stocks as it has since 2008, he said. “So it’s not a value trap. [Commodities have] actually bottomed out and are no longer underperforming and …  are at the level where historically they’ve been a good buy. If you’ve ever thought about buying commodities, … you should buy them now, because commodities look to be, on a historical basis, in a very interesting kind of price point.”

Gundlach expects the dollar to make “another leg down” after its recent rally. “That would be consistent with commodity prices going up, and be consistent with gold as a safe haven going up.”

But rising commodity prices and a flattening yield curve could portend a recession, Gundlach said.

The difference between the two-year Treasury yield and the 10-year yield has fallen to around 52 basis points, from 275 basis points in 2013.

“It’s getting to the point where it’s worth watching,” Gundlach said. “If the yield curve goes to zero, then we have a flashing yellow light for a recession-—it doesn’t guarantee anything, but clearly we’re getting closer to a recession zone.”

For right now though, don’t worry, he said. “We do not see anything [in the economic data] that says recession in the next six months. Maybe it will be a year or 18 months from now.”