The CRB Index is close to making two year lows. In our view it is indicative of the seriousness of the global economic downturn. The same hold true for oil. Unless the U.S. attacks Iraq, oil will break down even further by the end of the year, and it will find support around  $17-$18 per barrel. However, if the U.S. attacks Iraq, all bets are OFF!

Notice that the XAU has been in an up-trend for the past 12 months. However, it has yet to break above either its 20, or 50 months MAs. We are currently neutral -from previously bullish- on the XAU. Over the next 3-6 months -if the US dollar breaks below 111- then we would expect that it will find support at 105. We are neutral on the US dollar as well -from previously bearish.

The Utilities came all the way down, to the support line dating back to the lows of 1995 and 1997.  If they find indeed a bottom here, then our expectation is tat they will rally towards the 350 level. The real danger, for the Utilities is that they may be in the process of forming a multi-year head and shoulders formation, with the right shoulder about to start forming. 

Investors should pay attention to the Banking Index. The Index has broken below it 50 month MA, after 9 interest rate cuts in one year! We can not recall any other time, in which something similar has happened. It should serve as an alert notice that the market is detecting further economic deterioration.