Oil Spill

The time has come
To say fair's fair
To pay the rent
To pay our share
--Midnight Oil

The wild action in silver yesterday spilled over into commodities at large. It was pretty much chaos across the entire space. The CRB index itself was down about 5%.

Silver wound up getting smoked for 10% yesterday. That's a lot, but it's not super unusual for the commodity known as White Lightning.

More surprising was the move in crude, which was also down 10%. That's a big move for oil. On the week Texas Tea was down about 14%.

Technically speaking, there may be minor support for oil around these levels, but major support defined by the move off the 2009 lows rests at 90ish. I've been buying lightly around here and will probably look to get more aggressive if that 90 level actually shows up.

Although commodities were certaintly due for a correction, moves of this magnitude usually happen for a reason. Unfortunately, that reason is often not apparent until it is too late to act. What market participants need to be wondering is what situation(s), macro or otherwise, might this bearish price action in commodities be forecasting?

position in silver, oil