Many seem to be talking about the growth/reflation theme that has taken place post election. Did this theme really start improving post election? The chart below would put a little question into the date. Below looks at the TR Commodity index over the past 40-years. The index hit support at (1) and started to moving higher. When did the index hit a low last year on a monthly closing basis? The monthly low took place at the end of February 2016, 9-months “before” the election.

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The index remains in a downtrend since the highs back in 2011, which looks to have formedĀ the head, of a multi-year head & shoulder topping pattern. The swift decline that started in July of 2014, took it down to support at (1). This is where a counter trend rally started, that many call the reflation/growth rally. Regardless of what label one wants to put on the rally, the index did hit triple resistance in a downtrend at (2) and has turned south of late.

Joe Friday Just The Facts– The growth/reflation themeĀ would be put into question, if neckline support at (1), would happen to give way! A support break at (1), would suggest that dis-inflation or de-flation is in play.

So far weakness in the index since the highs back in 2011, has not impacted stocksĀ in a negative way at all. Stocks and this index did bottom together at (1) and both have struggled a little, as resistance was hit at (2) in the chart above.

Below looks at Crude Oil over the past decade and what is taking place after it hit an 800-pound resistance line.

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Crude Oil and the NYSE index don’t always correlate. They have over the past two years. With Crude kissing the underside of 800 pound resistance at (2) and turning lower, stock bulls hope that either Crude bounces back or correlations between the two end.

 

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past