The first half of 2010 was marked by general weakness in the CRB Index, following a modest 2009 recovery. In Aug, however, the signals started changing, and the bear case has weakened.

The Commodity Specialist view

MONTHLY CHART

Earlier on the Index failed to overcome resistance from around the 284.61 Jan-07 low –this was marked by a negative Key Reversal Month in Jan, heralding a corrective phase.

The assumption then had been that rallies would continue to be short-lived, but Daily chart developments have altered this view.

DAILY CHART

The earlier violation of the channel top projection weakened previous bear momentum, suggesting the picture was changing.

Initial resistance came from the prior Apr rally high, with subsequent weakness viewed as more likely to precede another bull leg – note that recent support came from a 61.8% pullback level.

The 280.83/282.80 resistance area (Apr high and 76.4% recovery level) is again under scrutiny – clear break through this would mark the next stage in the bulls’ campaign and seriously threaten the early Jan 293.75 high.

Mark Sturdy
John Lewis

Seven Days Ahead
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