Copper and DB Base Metals Fund (DBB): “Bull market is already underway”
Let’s review a contracting triangle chart pattern
by Bob Stokes
Updated: December 14, 2021
Classic Elliott wave chart formations are highly useful in forecasting financial markets.
One of those classic patterns is known as a "contracting triangle."
As Frost & Prechter's Elliott Wave Principle: Key to Market Behavior notes:
The triangle pattern contains five overlapping waves that subdivide 3-3-3-3-3 and are labeled A-B-C-D-E. A triangle is delineated by connecting the termination points of waves A and C, and B and D.
Here's an idealized contracting triangle in a bull market:
As you can see, a significant price advance is anticipated upon completion of wave E.
With that in mind, consider this commentary from our August 2020 Global Market Perspective:
The Economist commented on July 25 [2020] that copper's "traditional engine--strong global economic growth--is sputtering. Continued infections in America or a resurgence of the virus elsewhere could further depress demand for appliances, cars and other copper-dependent goods."
From our perspective, though, the completed contracting triangle pattern in copper and the metals complex indicates that a massive bull market is already underway. [emphasis added]
In other words, Mark Galasiewski, one of Elliott Wave International's global analysts, anticipated the prices of base metals to rise based on a classic Elliott wave pattern -- even though the "fundamentals" were determined by some observers to be bearish.
Indeed, take a look at this December 2021 chart, which shows the juncture at which Mark's bullish forecast was made and the subsequent price action:
Since that bullish forecast was made, the Invesco DB Base Metals Fund has increased in value by 42%, as of this writing on Dec. 13.
You can find many more forecasts based on Elliott wave chart patterns in our monthly Global Market Perspective -- which covers 50+ financial markets worldwide.
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