(Click on image above to enlarge it.)
This is the weekly Reuters/Jefferies CRB commodity Index, representing a broad basket of commodities. Note the NMC Cross Kiss sell setup in late August 2008, with a following delay bar and eventual short entry in early September. This signal has resulted in almost a two month 30% decline in the index (much more than that from the actual high in July), an unprecedented across the board move for commodities as a whole.
This NMC Cross Kiss Ocean setup (among the most powerful of the Ocean setups) coming from both a high time frame (weekly) and an index which represents a wide ranging basket of commodities should have been a warning that the entire commodity sector was likely to be subject to severe price pressure in the near future.
In other words, the Ocean setup in the CRB commodities index could be used as a tipoff that many of the individual commodities that make up the index will be coming under extreme pressure, with trading opportunities unfording accordingly. The same reasoning, of course, applies when a stock index like the S&P 500 generates a high quality Ocean setup—telling us that the individual stocks making up the index will often be generating their own Ocean setups as well.
For more information on Ocean setups, please see Ocean Advanced (Part 1) Charts w/commentary and Ocean Advanced Software (Part 2).
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