CRB, another telling sign

Another indicator pointing to a tougher time ahead is the Reuters/Jefferies CRB Index ('CRB'). From Chart 1 below, we can see that a downtrend has begun for CRB. A reversal in CRB normally coincides with a reversal in DJIA (see Chart 2), with a small timing difference. See the bullish reversal in March 2009 (denoted as 'B') and the bearish reversal in August 2008 (denoted as 'A'). The start of a downtrend in CRB, as noted earlier, would probably lead to a bearish reversal for DJIA.


Chart 1: CRB's daily chart as at May 18, 2010 (Source: Stockcharts.com)


Chart 2: CRB & DJIA's daily chart as at May 18, 2010 (Source: Stockcharts.com)