Relative stability is the phrase that best describes the price discovery across the commodity landscape from this morning. The equity markets were down 25 handles, which in regular market conditions would be a big move to the downside.
Crude oil stabilized on Wednesday after China moved to support the country's economy and stronger than expected U.S. durable goods data was released, but prices stayed near 6-1/2-year lows as a heavy supply glut kept market outlook bearish.
Crude oil is trading on very important historical support as the market tries to find support at $44 a barrel. For oil to go much below these price levels and stay there we would have be in a new paradigm, because according to research by Dave Boyce at Dixie-Industrial, it is a level that oil has been in only 3% of the time in the last 10 years.
Commodities and China investors waved a relieved goodbye to July on Friday following a brutal sell-off that has revived fears about the global economy and overshadowed more encouraging news from the U.S. and Europe.