You'll hear "reverting to the mean" or "mean reversion" bandied about occasionally however not on a daily basis......unless you're watching gold's long sell off since it's explosion to the upside. According to Investopedia, mean reversion is:
A theory suggesting that prices and returns eventually move back towards the mean or average. This mean or average can be the historical average of the price or return or another relevant average such as the growth in the economy or the average return of an industry.
Case in point is my theory that commodities are/have been doing just that. Click on this long term chart of the CRB Index for a better view.
After decades trading in a wide range, commodities took off as the dotcom bubble broke in 2000. Money had to go somewhere, didn't it?
But with a weak economy worldwide and no shortage of supply in grains or crude oil, just how low commodities will go is anyone's call at this juncture.
