Commodities

The top formation in the DJ STOXX 600 BASIC RESOURCES index confirms a reversal of the uptrend from the 2002 lows.
The downside risk in the coming weeks according to this bearish head and shoulder pattern is minimun 15%.
As you can see most of the index members are technically weak (most momentum indicators are on sell signals-table 1 and 2)
Large speculators are selling commodities suggesting hedge funds are deleveraging commodities

On a short term basis the sector is oversold (short term target reached and short term buy signal-green arrow on chart) meaning a rebound is occuring.