Most of the time, when someone is asked to pick their "favorite" of some thing, be it ice cream flavor, song, movie, etc..., they think long and hard and are still uneasy about choosing one answer at the exclusion of all others.
This is NOT the case for Elliott Wave International's chief commodity expert and Futures Junctures Service editor Jeffrey Kennedy. Ask Jeffrey which one of the total 13 recognizable Elliott wave patterns he likes above all else, and his reply is fast and unwavering: the Diagonal triangle.
Here's a quick go-to definition of the Diagonal:
Otherwise known as "wedges" (for their piece of cake-like shape), diagonals are easy to recognize on a price chart. They are five-wave patterns labeled 1 through 5 that can ONLY occur in the wave 5 position of an impulse, or wave C position of an A-B-C formation. Meaning: they are terminating patterns, and signal great change ahead.
Bottom line: Diagonals = Drama. In Jeffrey's own words, "They offer high-probability trade set-ups and set of flashing lights that say 'Swift and sizable move in the making.'"
For a visual aid, here is an ideal model of the diagonal shape:
So, you can imagine how exciting it is when Jeffrey comes across a diagonal in a market's price charts. Move over, because that market is going to get bumped straight to the top of Jeffrey's "Watch List" to become the main focus of his Futures Junctures Service publications.
Enter: Cocoa. Right now, Jeffrey has identified not one, but two diagonal triangles underway in the long- and short-term price action of cocoa. First, Jeffrey dedicates the "Featured" market segment of the current Monthly Futures Junctures to the sizable, multi-month diagonal underway in cocoa since March 2009. In several compelling close-ups and comprehensive analysis, Jeffrey reveals when, and where this wedge may end and thus introduce a powerful move for this market.
As for the short side -- Jeffrey uses the September 2 Daily Futures Junctures to expose a more immediate diagonal at large in cocoa. Here is an exclusive look at one of two charts presented in DFJ that depict the pattern's developement. (Some labels have been removed for this publication)