CRB Commodity Index

Courtesy of bloomberg.com

Thomson Reuters/Jefferies CRB Commodity Index closed at 281 on Friday. the Index has been moving in a downtrend direction in the last 12 months since end of April 2011. I expect the index to move lower until July to complete its wave 3. Wave 4 rebound may take about 4 months. Wave 5 will take another 5 to 6 months to take the index to below 200 to end the major wave C before middle of 2013.

Courtesy of traderslog.com

Soybeans may have completed its wave 5 of major wave I at 1505 level at the end of April. It closed at 1382 on Friday. Its major wave II pullback may end somewhere between 800 to 1100 for a 30% to 45% correction.

If CRB and Soybeans were to move lower, I would expect the crude palm oil price to move lower too. CPO is trading around Rm 3050 level down 14% from its mid-April high of about Rm 3560 level. It is possible that the wave 3 of major wave C has started. If it move in tandem with the CRB index, major wave C will end before middle of 2013 with a possible low of Rm 1700, another 44% drop.



.