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The Thompson Reuters Commodity Index created a multi-year head & shoulders topping pattern with the right shoulder being completed in the summer of 2014. Since the right shoulder took place, commodities have tanked in the past 18-months.
The large decline now has commodities testing the neckline, “as support” at (1) above.
Joe Friday, Just The Facts- Regardless of whether you own commodities at this time, the world wants/needs this commodities index, to bounce off support at (1) above!
Why is this level so darn important??? If the neckline gets taken out, the measure move suggests the index could work its way to the 200 level. I humbly feel this is a time that we want/need commodities to hold at the neckline. If they don’t, it could be a tad bit frustrating from a global macro situation, if commodities complete the measured move!