Commodities seem to be leading the equity market by a week or two lately, they were certainly warning of problems last week - whilst SP' was making a new high at 1422.
First, lets look at the CRB
CRB, weekly, 6yr historic
We have broken below what was indeed probably a bear flag..and now the next major target is the support level at 290.
*if 290 fails to hold..then its highly probable we'll quickly drop to 250. That's 40pts..around 15%. Would it be a bold step to suggest that would knock off 10% (at least) from the main equity indexes, giving us sp'1250 ?
CRX, weekly
The CRX is a commodity stock-related index. Take a look at the mining or some of the Oil/Gas sector lately, many of them have been smashed down. The CRX broke a major trend support just over 2 weeks ago. The next major support is 800 (5% lower)...if that fails..then the next primary bear target would be 690 - a further 15% lower - this would arguably suggest sp'1150 sometime 'soon'.
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Lastly this evening, Metals..lets look at Copper
Copper, weekly
The bearish count on this chart is very preliminary. It assumes a major cycle high occurred in February 2011. We have seen a bullish pennant break...to the downside! This was very surprising, and bodes VERY badly for the main markets.
From a cycle perspective, just look at the MACD (blue bar histogram)..we are due to go negative cycle NEXT week. So..further declines in Copper, and the wider commodity/equity market would be the default viewpoint.
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So...whilst I earlier posted near term index cycles that do suggest a number of days upside, I am trying to keep in mind that commodities are flashing major warnings - and have been for a number of weeks.
This is an especially tricky time to trade. The ultimate question remains...was Sp'1422 the top?
Goodnight!
First, lets look at the CRB
CRB, weekly, 6yr historic
We have broken below what was indeed probably a bear flag..and now the next major target is the support level at 290.
*if 290 fails to hold..then its highly probable we'll quickly drop to 250. That's 40pts..around 15%. Would it be a bold step to suggest that would knock off 10% (at least) from the main equity indexes, giving us sp'1250 ?
CRX, weekly
The CRX is a commodity stock-related index. Take a look at the mining or some of the Oil/Gas sector lately, many of them have been smashed down. The CRX broke a major trend support just over 2 weeks ago. The next major support is 800 (5% lower)...if that fails..then the next primary bear target would be 690 - a further 15% lower - this would arguably suggest sp'1150 sometime 'soon'.
-
Lastly this evening, Metals..lets look at Copper
Copper, weekly
The bearish count on this chart is very preliminary. It assumes a major cycle high occurred in February 2011. We have seen a bullish pennant break...to the downside! This was very surprising, and bodes VERY badly for the main markets.
From a cycle perspective, just look at the MACD (blue bar histogram)..we are due to go negative cycle NEXT week. So..further declines in Copper, and the wider commodity/equity market would be the default viewpoint.
-
So...whilst I earlier posted near term index cycles that do suggest a number of days upside, I am trying to keep in mind that commodities are flashing major warnings - and have been for a number of weeks.
This is an especially tricky time to trade. The ultimate question remains...was Sp'1422 the top?
Goodnight!
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