More Evidence the Commodity & Emerging Market Secular Bull Run is Over

2013-03-04 · by · in Basic Materials, Bear Market, Commodities, Equities, Sectors, Spread Trade, SPX, Technical Analysis

The chart below highlights the ratio of the DJ Basic Resources Index vs. SPX.

Note the secular rise in the ratio from 2002-2008 indicating the ongoing strength of the secular bull market in basic resources, commodities and emerging markets/infrastructure growth.

Note too however that over the past two weeks that the ratio has decisively broken through support line (1), which dated back to the beginning of that secular bull in 2002, as well as the consolidation pattern formed by lines (2) and (3).

We’ve attempted to highlight the reality of the secular bull in these areas being a thing of the past for some time and believe that the break-down in the chart below is additional confirmation of such.

2013-03-04 Ratio - DJ Basic Resources vs. SPX - Weekly