Is the Key Word "Greece" or "Deflation"?
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Headlines from around the world are focused on the election results from Greece. Is "Greece" the key word or is it about to be "Deflation" -- lower prices on a global basis?
Two decent barometers of global pricing pressures, Copper and the MS Commodity Index (CRX), may have created multi-year head & shoulders topping patterns, with the neckline support being tested right now.
Should the necklines break in these patterns, the key action by traders would be to sell, and the key headlines would become stories about deflation and lower prices!
When it comes to portfolio construction, if these necklines fail to hold as support, lower prices are to come, and asset protection would become a key investment strategy.
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