calendar

[hardnox]

http://stockcharts.com/h-sc/ui

Have to roll the linked chart to weekly, it won't link right if I do it.

The turn of the calendar last year set off a fierce rally in commodities that was, by some measures, the fastest swing ever from oversold to overbought. A blistering 8 weeks and then it flopped around for another 8 before beginning the steep descent.

Grains have been the only major sector that hasn't participated the last three months- while CRB/grains correlation tends to be pretty strong it isn't perfect.

Since grains have been the best performing subgroup in this quarter I'm assuming they'll likely underperform on a rally as index money rotates to the losers with rebalancing.

As this all becomes more and more of a money game each year I'm assuming the same may happen this year- tax loss selling into year end followed by reloading in the new year.

The oil debacle may make this a different game but I'm inclined to not press oversold markets for much longer and see.

[crophugger]

Money will flow to all ag commods or just gra7ns?

[hardnox]

Of course I'm only speculating as the current liquidation is pretty impressive.

There will be rebalancing of index funds and grains will be net losers there as they've been the best performing.

But I suspect that there will also be some total portfolio rebalancing to replace the money lost in commodity indices which would provide support for everything. That's what happened last year, pretty much across the board.

Last year gold was the tip and among gthe best performers but it was also one of the worst performing assets of the previous year. It's only down modestly this year, thus far.