Below is a price chart of Wheat since the start of this year.
As you can see, the picture is one of prices falling head first over the side of a cliff.
There’s no question as to when the knowledge of the grain’s turning tide would have been most useful. NOT now, three months and more than a hundred points lower into the decline. Try “right as the market’s reversal was getting started,” in early January.
For that particular information, the mainstream experts likely wouldn’t have been much help. In their eyes, Wheat’s powerful rally from its December 2008 bottom had more upside potential than a Sequoia sapling. On this, the following news item from the time says plenty:
“After watching US futures prices steadily decline during the past six months, the outlook for wheat appears to have turned a corner.” (January 7, AP)
As for seeing the selloff in wheat before prices started sliding -- the January 6, 2009 Daily Futures Junctures was right on time. In that issue, Elliott Wave International’s chief commodity expert Jeffrey Kennedy presented the following close-up and analysis of the grain (some Elliott wave labels have been removed for this publication):
“While it’s tempting to believe that this uptrend will continue, short-term wave patterns argue that the upside is limited and the next big move will be down. Moreover, prices are either at or approaching Fibonacci and structural resistance.”
In that initial snapshot, Jeffrey anticipated a decline below $5.80 a bushel into late January. One week -- and one sharp selloff later -- the January 12 Daily Futures Junctures amped up the degree and depth of Wheat’s coming downtrend. In Jeffrey’s own words:
“The manner and extent of today’s selloff strongly argues that the early December rally is complete. Not only does the manner and extent of today’s decline support this assessment, but price evidence points to this conclusion as well… denoting the presence of a third wave.”
On January 12, Jeffrey’s labeled chart of Wheat outlined a clearly bearish scenario: Prices would likely tumble down in a series of rises and falls to the $5.20/bushel area.
Elliott wave-based forecasts don’t always work this well, but when they do, the accuracy can be stunning. Now that wheat has closely adhered to Jeffrey’s script, the March 13 Daily Futures Junctures revisits the grain with newly updated price charts, objective commentary, and live video analysis of where Wheat prices could be in the coming days.
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