Clearing The Commodity Debate: One Market At A Time

Home > Commodities
Clearing The Commodity Debate: One Market At A Time
Cocoa, Coffee, Cotton, Corn, Cattle & Sugar

By Nico Isaac
Mon, 26 Jul 2010 18:15:00 ET

Get investable insights sent to your inbox at least once a week – for free. Challenge the way you think about investing with The EWI Independent.

Privacy

These days, the mainstream commodity experts are more divided than the Team Edward versus Team Jacob "Twilight" fan base. One recent news item represents the optimists and reads, "Commodity boom will continue. These crucial goods are a safe haven in turbulent times."

While another one right below it speaks for the bears: "Global Commodities Teeter On the Brink of Price Relapse."

Then, there's the independent third party: EWI's chief commodity analyst and long-time Futures Junctures Service editor Jeffrey Kennedy. And, in the just-released July 2010 Monthly Futures Junctures, Jeffrey presents clear and consistent insight into where these and more leading markets are headed:

Cuckoo for Cocoa: With London cocoa soaring to a 33-year high and hedge fund managers buying up the entire stock of Europe's cocoa supply, this market takes top billing. In the "Market Feature" segment of MFJ, Jeffrey presents both weekly and monthly price charts of London and NY cocoa that magnify FOUR major details: A dramatic wave structure, prices adhering to Elliott wave guidelines, a significant bar pattern, and telling behavior in volume. Combined, these clues reveal whether "the massive buying efforts at this time" are well conceived.

Next up is MFJ's "Wave Watch." Here, Jeffrey provides two labeled snapshots per 11 markets, each of which include clearly marked up/downside objectives and bold arrows pointing prices in their next likely direction. Off the top are these familiar favorites:

Hot Coffee: The June 2010 MFJ "Feature" highlighted coffee for the first time in a year-and-a-half. Opportunity was hot. Jeffrey saw "technical evidence supportive of additional gains in the weeks ahead." Soon after, coffee continued to rise, soaring smoothly to a two-year high before flattening out in the sideways trend we see today.
Now, the July MFJ steps in.

Sugar: In the days leading up to the February 2010 peak, the January 25 Daily Futures Junctures hit this sour note: "The upcoming market top should set the stage for a large and time consuming fall." From there, prices plummeted 50%-plus to a one-year low before pausing in June. Then, the June 4 DFJ"Weekly Wrap-up" turned bullish and showed prices rising to the 17.60-19.01 range. What now?

Cotton: The January 2010 MFJ "Wave Watch" presented an exciting picture that showed prices nearing the end of wave (4) down. Once complete, wave (5) was set to introduce a powerful rally to new contract highs. In short order, cotton stole the show with prices soaring to a new all-time high. Next, the May 2010 "Wave Watch" pointed DOWN and that's precisely which way prices went. July MFJ spins the long-term yarn.

Corn: Check out the following sequence of analysis:

June 2009 MFJ wrote: "The advance that began in December is complete. This means that the stage is set for renewed selling that should push prices below the 2008 low. This is an intermediate tradable top." A 35% plunge followed to below the 2008 low.
September 2009 MFJ saw the downturn coming to an end and suggested a "rally" was due to take prices back above the $4/bushel level. From there, prices rallied strong until petering out in a multi-month long, sideways trend.
July 14, 2010 DFJ With prices soaring to a four-month high in the first part of July, Jeffrey erred on the side of caution and wrote: "I believe the recent move up is a bit long in the tooth. In other words, the next move of consequence will be a decline."

Live Cattle: April 2010 MFJ "Feature" saw beef prices getting slaughtered and wrote: "Cattle will soon make a top near 98.00. After a triangle thrust up in prices to beyond the March peak of 96.300, the impulse wave will be complete. Then the stage will be set for a correction of this advance." Prices peaked in cited area and turned down to a seven-month low in early June. Next, the June 2 DFJ said "we can look for the current move up to continue." Now what?

Believe it or not, that's just the beginning. The July 2010 Monthly Futures Junctures presents labeled price charts for SEVEN other markets, along with Jeffrey Kennedy's in-door Trade'rs Classroom lesson on the importance of volume.

So, don't wait for the mainstream debate to resolve itself. Get the clear and objective view of the world's leading commodity markets today via a risk-free Futures Junctures Service subscription.

Tags: cocoa futures, coffee futures, corn futures, cotton futures, live cattle futures

Free 32-page eBook

Commodity Trader's Classroom

While commodity markets are known as some of the toughest trading environments around, these actionable lessons from skilled veteran Jeffrey Kennedy can help you trade commodities, or any market for that matter, with more confidence. Download your free eBook now.

CLOSE [ X ]

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.