Food and Gas Prices: Is the Rising Trend (Finally) Ending?
The Elliott wave structure of a key commodity ETF provides a clue
by Bob Stokes
Updated: June 02, 2022
Consumers around the globe are wondering when they will finally see some relief from rising prices at the gas pump and grocery store.
It's difficult for these consumers to get a handle on what to expect from reading recent headlines because some are conflicting.
For example, this April 27 headline says (Nasdaq.com):
Commodities Prices to Remain Sky High Throughout 2024
On the other hand, a May 27 Washington Post column is titled:
Commodities Will Be the Next Market to Succumb
Of course, that headline references the drop in prices for stocks, bonds and other financial markets and says commodity prices are the next in line for a reversal.
Elliott Wave International suggests that you look to the Elliott wave model for insights into commodity prices. It has served our subscribers well.
Here's what I mean: Back in October 2020, commodity prices had already completed their initial leg up and had slipped into a relatively shallow pullback.
Here's what our October 2020 Global Market Perspective said as this chart was shown:
The [Invesco DB Commodity Index Tracking Fund] has recently begun [a] second-wave correction.
Students of Elliott wave analysis know that a "second-wave correction" means that the next wave will be the strongest part of the price advance, i.e., the third wave.
Indeed, the January 2021 Global Market Perspective stated:
The Invesco DB Commodity Index tracking fund (NYSE: DBC) has probably begun [another wave] up, having ended its correction in December.
As you know, in the months that followed, food and fuel costs skyrocketed.
By June 4, 2021, there's this headline (BBC):
UN: Cost of food rises at fastest pace in over a decade
And, on Oct. 6, 2021, a CNBC headline said:
Americans are paying the most for gas in seven years
In 2022, our Global Market Perspective has continued to update subscribers on the Elliott wave structure of the Invesco DB Commodity Index Tracking Fund, as it has moved closer and closer to the pattern's completion.
Keep in mind that the Elliott wave method does not guarantee an exact path for future prices of a given financial market, yet Elliott Wave International knows of no other method which surpasses its usefulness.
You'll find our latest Elliott wave analysis of the ETF in our just-published June Global Market Perspective, as well as analysis of the United States Gas Fund and the Wheat Spot Price. (Hint: There IS a light at the end of this tunnel.)
Follow the link below to get our up-to-date insights.
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