Posted on 05/19/2010 5:58:07 AM PDT by blam
The Commodities Index Is About To Do A Death Cross
Joe Weisenthal
May. 19, 2010, 7:59 AM
In technical speak, a death cross is when the 50-day moving average dives below the 200-day moving average for a given chart. It's seen as a VERY bearish sign.
Anyway, we're about to see one in the well-known Reuters/Jeffries CRB index (a basket of commodities). Just a heads up.
From Stockcharts.com:
Image: Stockcharts.com
Just for reference, here's what the death cross looked like in Shanghai, which presages its huge dive.
Image: Stockcharts.com
[snip]
(Excerpt) Read more at businessinsider.com ...
I am already out of stocks and into a bonds
To Joe Biden, that’s a BUY signal.
English please.
yep, me too, parked ...
Okay, pork belly prices have been dropping all morning, which means that everybody is waiting for it to hit rock bottom, so they can buy low. Which means that the people who own the pork belly contracts are saying, “Hey, we’re losing all our damn money, and Christmas is around the corner, and I ain’t gonna have no money to buy my son the G.I. Joe with the kung-fu grip! And my wife ain’t gonna make love to me if I got no money!” So they’re panicking right now, they’re screaming “SELL! SELL!” to get out before the price keeps dropping. They’re panicking out there right now, I can feel it.
later
We are faced with an opportunity to buy large quantities of shares in good companies at vastly discounted prices. For those of us who won't be retiring for quite some time (25 years for me), this is not an all together bad thing. For those near to or in retirement it's a terrible occurrence.
Gold’s down $17 and the Pound and Euro dropped another couple of cents against the dollar.
It means the trend is your friend. All commodities (oil, lumber, etc.) are getting crushed because the trend is down.
The commodity funds have sell orders in every time it makes any recovery and buy just above the resistance level.
If it falls through the next resistance level to the down side , they sell again.
These funds have huge amounts of cash to play with. You want to get out of their way and go with the trend which is down. Get short on commodities in general.
Mr. Valentine has set the price.
It took about 25 years for price to recover ( I don’t know if that was inflation adjusted ) the last time. I don’t know what the return on dividends was. I suspect the taxes were quite high though.
"Get those brokers back in here! Turn those machines back on!"
Periods of recession are often followed by longer periods of prosperity. The recessions of ‘82, ‘93 and 2000 were followed by a number of years of great growth. Going conservative on short term investments and more risky on long term ones can pay off big over the bull market years following a recession.
This particular one has the wild card of increased regulation thrown into it, though, which could prolong the bear market. Not forever, but for a few years longer then usual.
Volatile times like this also present a nice time to capitalize on wild swings in the market. I have a couple that I’ve been buying and selling over and over again inside of a roth IRA so the wash-sale rule doesn’t apply. Sometimes even within the same day. Lean times just require a change in strategy.
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