Commodity Boom: Living On Borrowed Time? | Elliott Wave International

Home > Commodities
Commodity Boom: Living On Borrowed Time?
EWI's brand-new Monthly Futures Junctures reveals that the "train" for ONE kind of move is coming

By Nico Isaac
Fri, 23 Sep 2011 13:45:00 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

Over the past week, those resting on the mainstream "LORE"ls that commodities are the ultimate economic safe-haven GOT a very rude awakening: On Friday, September 23, commodities suffered their worst week in four months right alongside plunging stocks and precious metals.

Well, now that the market has your attention, EWI has a brand-new Monthly Futures Junctures to provide objective insight into whether the recent commodities sell-off is a brief, bearish hiccup -- OR here to stay.

In the opening "Featured Market" segment of the latest Monthly Futures Junctures (MFJ, for short), long-time editor and renowned commodities analyst Jeffrey Kennedy presents a compelling historic case study into the bellwether Continuous Commodity Index. There, Jeffrey's 30-year chart of the CCI shows how the markets powerful rally from the 2008 low is actually part of a larger Elliott wave cycle dating back to at least 1980.

If correct, Jeffrey's labeling argues not only for a "months-long" move in the CCI in the weeks to come, but also for the broader index to ultimately visit unexpected "price extremes." In Jeffrey's own words:

"If correct, then evidence should be present in other commodity price charts."

The second half of MFJ's "Featured Market" includes detailed price charts of the big three grain markets -- corn, soybeans, and wheat -- that do, indeed, bolster his overall outlook.

On pp. 6-12, you get "Wave Watch," where Jeffrey shows you 2 Elliott wave-labeled charts of 12 different commodities -- 24 charts total -- each marked with price targets and bold arrows pointing out their next likely direction. Off the top are these familiar favorites:

Cocoa: The January 2011 MFJ made this forecast: first, an advance to the 3653 area -- and then a reversal. In early April, cocoa landed smack dab in the middle of its cited target and turned down as anticipated.

After months of sideways consolidation, the August MFJ "Wave Watch" showed a bold arrow pointing DOWN. Now, with prices at a new contract low, the latest MFJ gives you new prices targets.

Coffee: June 2010 MFJ wrote: "... coffee's price could easily double from current levels." From its June 2010 low, coffee more than doubled in a 78% surge to 30-year highs before turning down early this May. Now what?

Lean hogs: Check it out:

· April 2010 MFJ wrote that probabilities favored a top forming near current levels that will lead to a months-long bear market.

Result: Lean hogs turned down from their April peak in 25% sell off -- BUT…

· The July 2010 MFJ saw that the original call for a sustained bear market was premature. A revised forecast called for a large rally above the 2009 peak.

Result: From the November 2011 low, hogs soared 60%, above the 2009 high.

We're only getting started. The brand-new Monthly Futures Junctures gives you 14-pages of original price charts and objective analysis on the long-term trends in store for the most popular commodities out there. Click here and follow the fast, easy -- and risk-free -- steps to get started.

Tags: cocoa futures, coffee futures, corn futures, futures trading, Jeffrey Kennedy, lean hog futures, soybean futures, wheat 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.

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.