AUTOREFRESH 
Commodities about to reverse ?
By saferanger || July 9, 2009 at 12:55 GMT
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The last few days the CRB Index has been on the backfoot whilst the VIX is back at recent highs. The reaction to the chinese cancellation of a coal delivery has led to an accelerated decline yesterday. Does this mean that commodities are about to unwind ? With commodity stocks as well as oil/gold declining sharply and investors more closely reflecting on the state of the global economy the risk is growing and currencies and bonds were quickly to react. The green shoots initiated rally might have been a bear market rally in fact now coming to an end…
My thoughts…………..not sure the cancellation of the noted coal delivery was a act of brinkmanship, after the Rio/China deal be terminated, much to China chagrin.
And now they have arrested 4 employee’s of Rio for spying….more to come!
Have read statistic’s last week detailing how overstocked China is of commodities , due to their maniacal crusade of stockpiling the last 3 months.
I have noted ,as with the cable, and commodities currencies alike, that the lower level long’s, will be kept in all possible circumstances, after such a aggresive decline that had preceded their entry, the mentality may be that such a negative move to those levels again, would be one off , indeed, so I find this comparable with commodities that have followed a similar path.
If more stimulus is produced, it will definitely enhance it’s cause, it may well pay to keep score how china 500bil+ stimulus in the next 3 months has improved their domestic economy.
The SP500 is key!
Totally agree with ya, Millward…just looking at the financial state of most G8/5 economies there won´t be much powder left for additional stimulus unless it is for the sake of inflation/deflation…watching the SP500 very closely, too! Having looked at the short sterling future its showing signs of instability at the highs…the party might be nearly over, prepare for some sobering, fairly soon…
Herd’em up!