An Old Bear Market's Death Leads to Resurrection

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“Ashes to ashes, funk to funky
We know Major Tom's a junkie
Strung out in heaven's high
Hitting an all-time low” –David Bowie

My dedication to the Federal Reserve and their threat of taking away the market’s “junk”-or close to zero interest rates. That threat has put commodities at their lowest levels since the 2007-08 crisis.

Not all commodities are floundering however. Cocoa, or the impossibly illiquid CHOC, is trading close to 2015 highs with all-time high back in 2011.

Sugar, SGG, a bit more liquid, is trading close to the 65-week Moving Average and getting ready to bust through it. That will be the first time since 2012 if it does.

Livestock or COW, (also illiquid), had a decent looking reversal off its all-time low made Monday.

Before I move on with a summary of agricultures, oil and the metals, a word more about the US Home Construction ETF ITB after last night’s feature.

The “gorgeous” chart setup with ITB’s converging moving averages, was presented tongue-in-cheek with the song “Wild Thing.” “Come on, hold me tight”. That was meant as a metaphor for the sell stop.

Although I mentioned 26.50 as the ultimate risk for a swing, the active trade gave us a swift exit with a minor loss. The lower risk for the steely nerved and the incredibly patient is still intact.

Can We Make It 3 For 3?

Back in the day, I was a member of The Coffee, Sugar and Cocoa Exchange in NY. So, if Sugar and Cocoa are moving, where does that leave Coffee?

I’d like to say in hot pursuit, but that would be premature. In JO, all-time low was made on September 23^rd this year. The good news: that low has yet to be violated. Coffee is cheap and still a major drug of choice for many.

Oil and the Metals

Crude Oil has support at 40.00. Under that point, I would rather wait for a sign of a blow off then try to guess a bottom. Silver’s last major low was back in 2008 at 8.45. Rather than try to guess a bottom there, best way to look at SLV is to wait for a move back over 15.60 the 65-week moving average.

The top thing I can say about Gold is that it closed back over 113.43, the last swing low on July 24^th.

One thing for certain, I’m intrigued with commodities since I love a mature bear market. Although I currently have little to no skin in the game, I have been around long to know that any market phase, when it grows old enough, eventually dies.

The Cycle Of Phases

In the case of the Stock Market’s mature Bull Run, life led to death. The recent rally could not get any of the indices past an Accumulation Phase. Appropriately to tonight’s theme, Granddad Russell 2000s never escaped Recovery.

In the case of commodities, death will lead to resurrection. It’s the nature of things.

“Time and again I tell myself
I'll stay clean tonight
But the little green wheels are following me” More Bowie-Ashes to Ashes

S&P 500 (SPY) Now the 200 DMA 206.50 becomes resistance with next support at 203.50 then 200.00

Russell 2000 (IWM) “114.70 is far but that is the 50 DMA.
From last night. You know why I watch here for best clues. Granddad. And you know I have been bothered by his lack of cooperation. I don’t think new lows, and I do see a possible move to 112 if cant clear 116

Dow (DIA) 175.75 the 200 DMA now resistance. 169-170 support

Nasdaq (QQQ) Broke the runaway gap low at 112.07. 108 area next best support with 114 overhead resistance

Volatility Index (VIX) On October 23^rd, when NASDAQ ran to new highs, this stayed green. I wrote about. Now we know why

XLF (Financials) That reversal from the new 60-day highs was too much for this.

KRE (Regional Banks) The runaway gap at 44.85 lost. Prodigal son losing faith

SMH (Semiconductors) Remember our shotgun wedding? Possible miscarriage could cancel plans

IYT (Transportation) And Trannies-our youngest sib? Waited for a break over 150 to get the gown pressed-never happened

IBB (Biotechnology) Big Bro has never been the same since big Pharma lost its way.

XRT (Retail) Held 44.00. Granny, we are hoping you come alive-

IYR (Real Estate) On the 50 DMA

ITB (US Home Construction) Review Wednesday nights daily-not even a sexy chart can hold up in a major market decline

GLD (Gold Trust) Held the prior 2015 low. Means nothing unless today turns out as a reversal with a close Friday over 104.32

SLV (Silver) Oversold at major support around 13.50

GDX (Gold Miners) Over 14 gets me interested

USO (US Oil Fund) 13.00 next level to watch

UNG (US NatGas Fund) Still holding the one day pattern reversal low from 9.35

TAN (Guggenheim Solar Energy) 26.00 is do or die

TLT (iShares 20+ Year Treasuries) Closed right at 119-pivotal for Friday

UUP (Dollar Bull) 25.57 next support level 25.80 pivotal

EWG (Germany) Not a bad looking chart if holds 26.10

SGG (Sugar) Over 35.10 should continue higher