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Lean Hogs at a 1-Year Low: Elliott Waves In Action
The March 2012 Monthly Futures Junctures warned of an “exceptionally sharp selloff” in lean hogs ahead of… an actual, exceptionally sharp, selloff!
By Nico Isaac
Thu, 30 Aug 2012 18:30:00 ET
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Everyone knows: If you want the best meal in a fancy restaurant, ask what the chef's favorite dish is. That's what you order.

Likewise, if you want to make the most of the near-term Elliott waves, well, you ask which of the 13 known Elliott patterns is the favorite of EWI's senior analyst and Futures Junctures Service editor, Jeffrey Kennedy. Then you wait for it to emerge on a price chart.
 
Jeffrey's answer, by the way, is the Elliott wave diagonal pattern. Here's a brief definition:
 
A diagonal is a 5-wave structure (1 through 5) in the direction of the larger trend, in which each wave subdivides into 3 smaller waves. (3-3-3-3-3). Wave 4 almost always moves into the price territory of wave 1. An ending diagonal occurs primarily in the 5th wave position, implying dramatic reversal ahead.
 
It all sounds great in theory, but what about practice?
 
Well, in the March 2012 Monthly Futures Junctures, Jeffrey observed the completion of a huge, multi-year ending diagonal in the chart below of lean hogs. This ending pattern, combined with a newly-formed 1-2, 1-2 sequence to the downside, bolstered this bearish assessment of lean hogs:
 
“What would confirming price action look like? An exceptionally sharp sell-off in lean hogs where prices travel far in a short period of time.”     
  
 
Flash forward in time and the next chart (from the August 28 Daily Futures Junctures) shows how an “exceptionally sharp sell-off” was exactly what lean hogs experienced. From an early 2012 peak, hog prices have been butchered and now stand at a 1-year low.
 
 
 
Get the best there is on the “menu” of objective, Elliott wave analysis of key commodity markets: order a risk-free Futures Junctures Service subscription today. The latest Monthly Futures Junctures “Featured Market” video-plus-print segment presents “monthly, weekly, and daily” price charts of lean hogs that ALL call for a “noteworthy move well into next year.”
 
Want to see what big moves are in store for commodities? See them now -- RISK-FREE for 30 days  

Bonus: Get instant access to "Jeffrey Kennedy: Unedited," a 3-part, 3-plus hour video series covering analysis, trading, and commodity forecasts.

Get the best short-term commodity opportunities from an Elliott wave expert -- 5 days a week.

Futures Junctures editor Jeffrey Kennedy is your personal opportunity scout as he searches the world's leading commodity markets and serves up his best picks 5 days a week.
 
You get in-depth commodity analysis, daily video forecasts for up to 18 different commodities, plus Elliott wave trading lessons to help put your knowledge into action. 

"A concise, daily, audio-visual information barrage. Absolutely the BEST value anywhere." - Tom P.
 
 

 

 
 

Tags: commodities, diagonal, Elliott wave, Jeffrey Kennedy, lean hog futures
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The Elliott Wave Principle is a detailed description of how financial markets behave. The description reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific Elliott wave patterns in price movements. Each pattern has implications regarding the position of the market within its overall progression, past, present and future. The purpose of Elliott Wave International’s market-oriented publications is to outline the progress of markets in terms of the Wave Principle and to educate interested parties in the successful application of the Wave Principle. While a course of conduct regarding investments can be formulated from such application of the Wave Principle, at no time will Elliott Wave International make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Investing carries risk of losses, and trading futures or options is especially risky because these instruments are highly leveraged, and traders can lose more than their initial margin funds. Information provided by Elliott Wave International is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your advisor to explain all risks to you before making any trading and investing decisions.