Tuesday, October 29, 2013

Technical Analysis: Louise Yamada Says Commodities Are In A Death Cross

As I said in 2012's "Louise Yamada Sees a Big Bear":
Louise was very sharp during her time at Smith Barney but had a stumble just before the start of the bull back in 2009* that made me shy away from posting:
March 2, 2009
Louise Yamada: Don’t “venture into the waters” 
That was exactly one week before the bear market bottom.
Here's her latest via Yahoo Finance:
Long-term commodity prices are at a critical point. And, right now, the technicals indicate they're headed down.
That's what legendary technical analyst Louise Yamada, managing director at Louise Yamada Technical Research Advisors, says is ahead. She reached that conclusion by analyzing the long-term chart of the Thomson Reuters Equal Weight Continuous Commodity Index (the CCI). The CCI is a basket of 17 commodity futures such as contracts on metals, grains, energy, and livestock. It is considered a benchmark for commodity prices.

Since mid-February 2011, the CCI is down 25%. According to Yamada, that was the start of a bearish signal in the charts.

"It is a descending triangular formation which suggests that every rally along the way over three years has failed," says Yamada. "In other words, someone sold into each of the rallies over the past couple of years."
It's not just the descending triangle that has Yamada worried for the index. The moving averages have also been bearish for over a year and half....MORE