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!