“The Commodity Research Bureau index (CRB) of resources as a whole has dropped 10% in the past week to the key technical 335 area, which was a halfway recovery of the 2008 extreme highs to 2009 extreme lows.
“As a trader, this news is a potentially bullish buying area for a number of markets that are now near long-term uptrend supports. The reward-to-risk is much more attractive at these levels for continuation of global demand growth.
“The overall basket of commodities has been in an overextended, yearlong strong upward trend. One of many major pullbacks, the last few have been bullish buying opportunities, which encouraged top pickers to go short. Timing a major market reversal is nearly impossible and almost always a gambler's ruin.
“Buying against support and trend levels has been successful in the past. A close below the 335 halfway 2008-2009 recovery point on a weekly basis would get attention and renewed evaluation of the trend. It is definitely too soon to make that call.”
Indeed, the CRB is demonstrating some resilience of its own this morning, down only 4 points, to 340.