On 10/18 the chart below reflected that in 2008 a Dollar breakout and aCRX (Commodity) breakdown led to a 50% decline in commodities in a matter of months and the patterns of late look almost identical to the 2008 patterns! (see post here)


Below is an update to the above chart with the addition of the CRB index…


The patterns in 2011 remain very similar to the patterns in 2008! 

 I am surprised that the recent rally in Crude Oil, from the lower 80’s to $100, wasn’t able to push the CRB above its falling channel, which reflects continued weakness in other commodities.  Great Escape 1 took place in 2008 and the potential for a GE2 (Great Escape 2) continues to be a possible outcome.

The break of support in the CRB and CRX back in May, suggested that investors should pull back on the exposure to risk assets. Until the CRB and CRX can break above falling resistance lines, this repeating pattern continues to suggest that from a portfolio construction angle, risk assets will be challenged going forward.

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