Commodity Weekly 21 January 2014

S&P GSCI Total Return Index

Complex divergence of the daily RSI reflected a loss of downside momentum, market upside corrective

The S&P GSCI Total Return Index as suspected has not maintained its initial break of the 2009-2014 uptrend. The recent 6 month low was not confirmed by the daily RSI and we are currently seeing a small corrective rebound.
Rallies should find initial resistance at 4732 (23.6% retracement of the move down from the August high) and potentially 4790/4805, the 200 day ma and the 38.2% retracement of the same move. We would expect to see the market struggle here – however its should be noted that the current Elliott wave count on the 2450 minute chart is implying a slightly deeper retracement (4820/45).
A close below 4615 (recent low) would be negative and target initially the 4493.50 2013 low. Failure here will target 4442/47, the 50% retracement of the move from the 2009 low to the 2011 high and the 78.6% retracement of the move from 2012. This represents our medium term downside target.
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