Eoin Treacy's view The Continuous Commodity Index has fallen for 11 of the last 12 consecutive weeks and in the context of its more than yearlong downtrend is becoming increasingly oversold relative to the declining 200-day MA. However, a clear upward dynamic will be required to check momentum beyond a brief pause.

Brent Crude Oil has fallen abruptly since late April and is approaching a potential area of support in the region of $100. A clear upward dynamic will be required to suggest the return of demand in this area.

Declining commodity prices generally and oil in particular represent positive news for the global economy. However commodity related investments have suffered as prices have declined. In many respects, while the decline to date has been less extreme, the price action for a number of stock markets is quite similar to that posted from July 2011. At the time, industrial and commodity related shares fell hardest while sectors leveraged to the growth of the global consumer were steadier. (Also see Comment of the Day on August 26th).

The Brazilian, Russian, Chilean and Peruvian stock market indices, the Canada Materials Index and Australia's Resources Index have all fallen precipitously over the last couple of weeks and developed short-term oversold conditions. The Colombian index has deteriorated and is now testing the 200-day MAs. The South African Johannesburg All-Share Index has dropped to test the lower side of its 3-month range and is currently testing the 200-day MA. Clear upward dynamics will be required to suggest demand is returning to dominance.

The strength of the US Dollar against the majority of commodity currencies is an important consideration because it can often reflect investor confidence in the respective countries. In this regard South Africa is worthy of mention because the Rand has declined much more abruptly than the stock market which is approximately 25% weighted by BHP Billiton. The US Dollar has been forming a first step above its base since Q3 2011 and has rallied to test its upper boundary near ZAR8.5. While it has paused today, a sustained move above that level would likely coincide with a further deterioration in the stock market.