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Another CRB Support Level

10/16/08 08:21:38 AM
by James Kupfer

The CRB has fallen to a significant Fibonacci retracement level. Look for a bounce near here.

Security:   CRY 0
Position:   Buy

Last Monday (October 6, 2008), I reported that the CRB index was approaching a convergence of support zones around 328 that "may help the CRB from falling any further." They did not.

The CRB briefly paused at the support level I pointed out and then proceeded to plummet through it. A little over a week later, the CRB is now at another important support level near 293.

There are two important points of support that the CRB is currently at. First is a 61.8% Fibonacci retracement level drawn between the start of the commodity bull market in November 2001 to its recent top in June/July (Figure 1). This is a very long-term support line that should be of major importance. Second, the CRB is approaching the green support line drawn from the major January 2007 bottom.

FIGURE 1: CRB, DAILY. This long-term support line should be of importance.
Graphic provided by: Wealth-lab.
While this 293 level is not likely to hold for the long term, it could prove to be a major bottom for the next few weeks to months (Figure 2). Should it not hold, then look out for the next major support level around 250.

FIGURE 2: CRB, DAILY. While this 293 level is not likely to hold for the long term, it could prove to be a major bottom for the next few weeks to months.
Graphic provided by: Wealth-lab.

James Kupfer

Mr. Kupfer is a market professional and amateur stock market commentator. Disclosure: It is likely that Mr. Kupfer has or will enter a position in any security he writes about.

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