CRB, Thomson Reuters/Jefferies CRB index , update

Back in Jan of 2011 we opined that this index would peak at around 350 in or around March of that year, and then drop like a stone (see that blog under CRB). The timing was pretty well on but the level was slightly off as the index climbed to 370. Here is today’s chart;

CRB june 2012

We are not at all confident about the count that we put on this chart after the high of 370. It looks a lot like the “cascading waterfall” that Don Cox from Harris Bank used to call this thing in his “Points” publication. However that specific pattern does not exist in land, so perhaps it is a combination. In any event, what we are (and were) confident about is that this index will drop at least to the 250 level before a serious rebound might (repeat; might ) occur. The index is not readily tradable but if you extrapolate the direction of this index to stocks like Potash and even stocks in the metals and oil space, even if they are not represented per se in this index, you would have saved yourself a lot of agony lately.