The Commodity Crash is The 2nd Worst in Almost 4 Decades

by The Short Side of Long

Today's chart of the day focuses is on longĀ term prices of commodities. The chart below uses CRB Index, but from time to time I also use CCI (Continuous Commodity Index) as well as RICI (Rogers Intentional Commodity Index.

Chart Of The Day: Commodity crashĀ is 2nd worst in almost four decades

CRB Index PerformanceĀ 

Source: StockCharts (edited by Short Side of Long)

Throughout the 1980s and 1990s, when commodities moved in a sideways bear market, the annualised losses did not exceed 20% threshold. However, during the Lehman Panic in 2008, prices tumbled by over 50% over a 12 month period. Furthermore, the recent crash in commodity prices on annualised performance basis is down 30% from 12 months ago, which is the second worst price sell off in such a period in almost four decades.

So have commodities found a bottom? The strong support around the 200 level on the CRB Index most likely implies that the answer is yes. However, the question is what kind of a rebound will prices experience? Will it be a V-shaped rebound seen in 2009/10, will it be a basing pattern or will it be yet another sideways secular bear market we saw during 1980s/90s?

 

Copyright Ā© The Short Side of Long

Total
0
Shares
Previous Article

Earnings Season: It's all about the USD!

Next Article

Stock Market Losses With Low Interest Rates

Related Posts
Subscribe to AdvisorAnalyst.com notifications
Watch. Listen. Read. Raise your average.