On October 29, 2013, we did a review of the Dow Jones-UBS Commodity Index (now the Bloomberg Commodity Index [BCOM]) in which we concluded with the following commentary:
“Already we have indicated the extreme downside target for the commodity index at 79.32, based on the work of Edson Gould’s Speed Resistance Lines. However, if we are in a commodity bull market, as we’ve made reference to in our January 1, 2009 article titled (found here), then there is a good chance that a bounce at the long-term technical support line would mark the end of the cyclical bear move in commodities.”
All along it had been our contention that if the commodity index bounced at the long-term technical support line then the declining trend would be over. Unfortunately, that bounce never came to pass. Only on a marginal basis did the price decline stall on or around mid-November 2014.
Since mid-November 2014, the Bloomberg Commodity Index has been in a free fall. All that we can expect now is for the commodity index to decline to the following downside targets at 102, 83 and finally the extreme downside target of 79.26.
