Where will commodity prices go from here? Well, just as all asset classes moved up in a simultaneous bull market from 2003 to 2007, we now have the possibility of all asset classes—equities, property, bonds, and commodities—moving down in a simultaneous bear market. It could be protracted, global, and unavoidable.

–We asked Gabriel to take a look at the CRB Index and tell us what he saw. He produced the chart below.

–What does the chart tell us? Gabriel says that, “The commodities index is experiencing a correction that should go further…This downturn corrects the bullish trend started in last August. Between August 22 last year and July 3 this year (points A and B on the chart), the index jumped by nearly 57%.”

–“The bearish momentum is likely to drive the index lower,” Gabriel adds. “The 75-day moving average was a good support to the bullish trend. The price action crossed below it on July 18. It was also corresponding to the 23.6% Fibonacci level. This breakout is a clear bearish signal. Moreover the index is not yet oversold.”

–Well. None of that is good news for resource bulls. It suggests that there is a capitulation low yet to be put in. That’s the point at which even resource investors begin to doubt the wisdom of being long. The market will shake out anyone without conviction between now and then.