Headlines are screaming that agricultural and industrial commodity prices are crashing and burning. We say "not so fast", and though the Commodity Research Bureau's index has fallen steadily since July, the bigger falls started a year ago. Remember that this index is heavily weighted on energy and precious metals, and many will welcome cheaper diesel and gas - tough luck, oil majors. The index has retraced a Fibonacci 78.6 per cent of the commodities boom that started in 1999, currently the C wave 61 per cent of A's fall. Now that it has edged back into the ultra-long-term band established in the 1990s at between 120 and 200, we expect basing at 190 to 200 and allow for further but far more cautious dips.
