CRB Total Return Index

Product Summary:
The CRB Total Return Index is comprised of 19 commodities (Aluminum, Cocoa, Coffee, Copper, Corn, Cotton, Crude Oil, Gold, Heating Oil, Lean Hogs, Live Cattle, Natural Gas, Nickel, Orange Juice, Silver, Soybeans, Sugar, Unleaded Gas, and Wheat).  I personally monitor 15 of these 19 markets on a daily basis. 

Market Summary:
The CRB has been in a downtrend since April of 2009, but I'm starting to see strong signs of a potential bounce higher. The most recent leg down starting from the 5/6/2015 high has 3 measured moves.  MM #1 has a medium deep retracement (bearish) with a 9:17 left-handed skew (bearish).  MM #2 has a deep retracement (bearish) with a 13:3 right-handed skew (bullish).  MM #3 has a shallow retracement (bullish) with a 5:4 right-handed skew (bullish).  Here's what these 3 measured moves together are telling us:
* Bearish retracements for MM #1 and MM #2 indicate a counter trend rally that should retrace a minimum of 50%.
* Shallow retracement for MM #3 indicates the potential bottom can extend to lower Fib projections.
* Right-handed skewing, which is bullish, on 2 of the 3 MM's indicates the potential bottom can extend to lower Fib projections.
* Shrinking time ranges of the three MM's (26 to 16 to 9) indicates the downtrend is slowing down and a bottom could be near.

Potential Bottom:
Now that we know a potential bounce is in play, let's look at some signals of where this turn could happen.  First, we find potential bottoms using Fib projections of the 3 measured moves.  I like to use the following averages of MM #1 and MM #2: 261/261, 361/261, 361/361, 461/361, and 461/461.  The shallow retracement of MM #3 along with the bullish skewing of MM #2 and MM #3 tells us that the potential bottom could extend lower than the 261/261 area.  As we reach each of these averages we look for other clues to help guide us.  Prices reached the 361/361 level on 8/7/2015 and immediately formed a morning star candlestick pattern, which is bullish.  We also see bullish divergence on the RSI and a bullish crossover on the MACD.  Finally, the 8/7/2015 low was formed in the same area as the February 2009 low.  This former low was an area that buyers came in and pushed prices signficantly higher.  It stands to reason this could be a good place for a counter-trend rally.

Potential Support Zones:
361/361: ~ 198.30
361/461: ~ 195.40
S1: 195.02
461/461: ~190.07
S2: 186.93

Potential Upside Rally:
It's very possible that the 8/7/2015 low will provide the bounce, but we could see a little further downside before moving higher.  Either way, I believe a counter-trend rally will happen soon.  Using the potential low of 198.35, I see strong possibility of a rally to the 50% retracement or better.  The 50% retracement is currently @ 216.24.

Potential Upside Targets & Obstacles:
10 DMA: ~ 202.30
MM #2 retracement value: ~ 204.75
MM #3 retracement value: ~ 205.16
20 DMA: ~ 205.93
MM #1 retracement value: ~ 208.79
Monthly Pivot: 210.90
38% retracement: 212.01 [conservative target]
50 DMA: ~ 213.18
50% retracement: 216.24 [conservative target]
100 DMA: ~ 219.42
61% retracement: 220.46 [aggressive target]
78% retracement: 226.26 [extreme target]

Summary:
The recent 3 month downward move has started to present numerous signals of a potential counter-trend rally.  I believe if the short-term low hasn't already been put in @ 198.35, then it will happen soon before reaching 189.00.  Finally, once a low is established, I anticipate at least a 50% retracement rally.