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Basic materials have reflected relative weakness over the past year, suggesting global softness was in the cards! It appears the price action of IYM was reflecting a more accurate story than the S&P 500! Once support broke in 2008, this key ETF fell hard and so did the broad market! Now IYM is attempting to hang onto support.
Crude Oil and Copper broke below their multi-year flag patterns of late (see Oil/Copper flag breakdowns), sending a signal of global softness and deflation (deflation about to pick up speed) If IYM fails to hold its grip at support, it will join Oil/Copper in sending another sign further deflation is taking place!