Death Cross Warning from Commodities

On a daily timeframe, Reuters/Jefferies Commodity Index <CRB> is about to signal an ultra bearish death cross. Since February 2016, price action has rejected the 50/100/200 simple moving average. The self-imposed production cut and freezes from OPEC has been merely an illusion with the physical market continuing to be oversupplied. Even in China the self-imposed Iron Ore cuts was also an illusion with Iron futures crashing >30% in recent weeks. The commodity industry has not rebalanced and this may signal the next deflationary wave is right around the corner.

<CRB> Daily death cross

<CRB> weekly rejects 50 and 200sma

<CRB> monthly descending contracting wedge appears to show rebalancing is not anytime soon, which signals deflationary trends for the coming years unless a major supply disruption occurs.