"When stocks are falling, commodities come calling."
So goes the mainstream mantra that hails hard assets as safe havens during equity declines. But, for anyone who followed this strategy in September 2011, the outcome was far from fruitful.
Case in point: Last month, the supposed inverse correlation between stocks and commodities unraveled when the bellwether Continuous Commodity Index (CCI) declined 13%, right alongside falling equity markets.
Now, while the usual suspects continue to investigate the reasons behind the sector's surprising September sell-off, EWI's Futures Junctures Service editor Jeffrey Kennedy has long since had this case signed, sealed, and solved.
In the September 2011
Monthly Futures Junctures, Jeffrey presented a special, expanded "Featured Market" segment on the Continuous Commodity Index that argued in favor of a major turn down via these timely insights:
"The CCI tells a bearish story when we apply the most basic Elliott wave analysis..."
In the "Featured Market" analysis of the
Monthly Futures Junctures, Jeffrey then explains how confirming bearish evidence present in other commodity price charts -- led by soybeans, corn, and wheat -- solidified his overall bearish outlook for the CCI as a whole. Writes Jeffrey:
"The most logical course for soybean prices to travel is down."
Last check: Since September, the CCI's sell-off has indeed accelerated. From its three-year high on August 31, soybean prices alone plummeted 20% in their sharpest rout in three years.
So, with the days of September behind us, the big question is this: Is the CCI downtrend also in the past?
Well, right now in the October 14 Daily Futures Junctures "Weekly Wrap-up," Jeffery shows you 2 newly updated charts of the CCI.