Commodity Bear Market

Commodities have fallen into Bear Market territory, down 21 percent as measured by the S&P GSCI Index (see Bloomberg article). Amazing, the bear market defined 20 percent or more move down has occurred since the July 3rd highs for the index, just a little over a month ago. Specifically, gold is off 22 percent from its recent highs, silver is down 33 percent, platinum is down 36 percent, and crude oil has fallen 23 percent. The move is certainly what you would call a serious short-term correction, and starts to make you wonder when and if a snap-back is going to occur, even if the move is just temporary. Nonetheless, the weak reaction of crude oil to the recent military issues in Georgia certainly makes one suspect that crude oil wants to go down further. It will be interesting to see how this plays out. The $110 and $100 prices should be the next interesting decision points for crude.