S&P GSCI (Commodity Index)

Commodities have clearly underperformed equities over the past two years. This is due to correction in metals, already weak agricultural commodities and relatively quiet energy prices. None of the commodity index components had a strong enough trend to force the S&P GSCI out of its consolidation range, though signs show that this might be changing. Low volatility on the commodity index suggests a strong trend period should follow in the next few months. Breakout above 655 will be extremely bullish for the commodities – likely to put an end to the two-year sideways consolidation. Breakdown below 600 levels will result in a downward trend and target 500-550 area in a short period of time.