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Commodities Breaking Lower

Published 11/19/2013, 04:49 AM
Updated 07/09/2023, 06:31 AM
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Chart 1: Commodities performance has been subpar since May 2011
Commodities Overview: YoY Performance
Commodities have been under-performing for a while now, with the official index peakin in May 2011. Annualised performance into July 2012 was already 1.5 standard deviations oversold (20% bear market), however the recovery since then has been anaemic. It seems that commodities could experience yet another 20% drawdown on annualised biases in the coming months (the reading is already at a -10% loss for the past 12 months). Technically, the chart above shows that the CC Index could break lower.

Furthermore, bearish trends are dominating as certain commodities have already been in strong sell off in recent months including gold, silver, copper, crude oil, corn, cotton and coffee amongst others. If further selling occurs, the CC Index has a strong support area about 10% lower at 450 points on the chart above. Finally, sentiment on commodities such as crude oil, silver, coffee, corn, cotton and wheat is already at levels associated with previous bottoms.

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