In the 1970s commodity secular bull market, there was one year where everyone had got really carried away with commodity bullishness and thought everything was going to the moon, and then commodities experienced a crunching setback. That was 1974. You had grains going bananas in the year or two beforehand, gold had rallied from $35 to $200 over 4 years, oil quadrupled in 2 years. Rather reminiscent of recent times. A huge gold fund was launched so private investors could get in on the party. What happened? Gold promptly HALVED, falling from $200 to $100 that year. A classic case of buy the rumour sell the fact. Everyone had gotten gaga on commodities, and they piled in just in time for a brutal one year bear market. Well, it looks as though the same might be happening here. The long-term outlook for commodities is still bullish, however the medium-term outlook is bad. Signs of excess speculation, collapsing global demand, political attention, demand destruction due to the high prices, and a tape that trades like a defenestrated cold war dissident. Another interesting fact was that this coincided with the recovery from a brutal bear market (73-74). The current market has not been as brutal, but it has been a rather sharp-toothed bear. Now, looking back to the 1970s, I'm sure after that bear market in 1975, most people had given up on commodities. Yet what happened was the greatest buying opportunity of the decade. From the 1975 lows, gold went up 8 fold in 5 years, silver went up 20-fold, and some other commodities (e.g. oil, sugar) soared into the stratosphere as well. Could it be that the same happens this time? In other words, a nasty 1 year commodity bear market (from July 08 to mid 2009, for example), followed by a resumption of the secular bull, just as everyone is giving up on commodities as an investment class. If the late 70s are anything to go by, then the later stage commodity bull market resumption will be more narrow. You won't want to just buy the GSCI and hold on. Rather, focus on the commodities that are making new highs, stick to them alone. Another suggestion is that the commodity market may experience more selling than people expect. It really needs to go down far enough so that almost everyone gives up on it. Every bull, every "end is nigh" gold-bug, every pension-fund that has been sold on commodities as an asset class - all must be driven into despair and practically abandon commodities. That's what it would take to make a real bottom - and it's some time off IMO.