Last week commodity prices continued their inevitable crash and stock indexes rallied to solid gains. The two had nothing to do with each other however despite what market folks put out. Commodities are always, always subject to the 50% retracement rule. No matter how high commodities go, they will appear at some point in time half way back from their journey. So calculate that for oil, gold, corn, etc.
Stock indexes on the other hand rallied last week simply due to a pervasive bearish malaise which made it virtually impossible for them to break. Now the bears have been driven to the edge of failure but still hang on as this week begins, looking for trading to reject the closing levels of Friday and resume the despair.
