Here we have a 5-year weekly chart showing DBC to be in three year downtrend - much like gold and silver. After topping in mid-2011, it has obeyed the declining line of resistance shown above. After tagging the line just a couple months ago, it has fallen, on heavy volume no less, back down to intermediate support (shown by the solid green horizontal line). Short term indicators (not shown here) are suggesting a short-term bounce, but if you look at the weekly MACD, RSI, and moving averages, it appears that further downside is in the making. Look for the 50 dma to provide resistance if we do get a brief rally.
Longer-term, you can see the falling wedge pattern continuing to play out. The dashed horizontal line, marking the low from 2012, will be the next area of support. If this fails, expect a swift drop back to the low 20s where you can see the congestion from 2010.
The action in the DBC should be a bit surprising if you subscribe to the notion that we are in a booming economy as evidenced by yet another all-time high in the S&P today. If a strong stock market reflects a strong economy, then one would think commodities, and industrial commodities in particular (silver, aluminum, copper, oil, etc) would be in high demand and therefore rising in price assuming no readily available supply glut. Since the DBC is falling, it suggests either falling demand or increased supply (all else being equal) for the underlying commodities.
Based on the factors noted above, my bet is that the DBC will break down from here, falling 20% or so back to 2010 levels. In my opinion, this runs contrary to a strengthening economy, which should require more of these commodities to support increased industrial activity. So what's going on? As I've stated in previous posts (such as here and here), this bull market is getting very long in the tooth. We're starting to see evidence that a longer term trend change is starting to take place. While it hasn't happened yet, there are numerous indicators out there starting to flash cautionary warnings. In addition, it seems undeniable that the Fed, through unnatural market policies such as QE, has entirely decoupled the stock market from economic activity. Take a look at the graph below which shows Federal Reserve's total assets overlaid with the S&P 500 (from the Fed's own website). The green circle denotes when the first QE program went into effect.