The other day, I was trailing behind a carload of friends on the way to see a music concert in an unfamiliar part of town.
Yet, the moment we merged onto the interstate, it was as if I had warped into one of those racing video games where the cars in front of you swerve and weave in and out of the road: First a zigzag to the far left lane, then a lurch back into the right one, then, once it seemed like the driver ahead had finally settled in at a steady 60 mph, he darted off onto the exit ramp, and re-entered the highway going in the opposite direction.
By and by, it felt a lot like following the mainstream financial press on their crisscrossing course to commodity markets' analysis.
On this, the recent news items regarding SUGAR drive the point home. To wit: On March 20, sugar futures ended an agonizing week with prices dropping 8% to a three-month low. According to the mainstream experts, however, the steep sell-off was right on track with the fundamentals:
“A declining equity market and a strengthening dollar spurred investors to cut their [commodities] holdings to raise cash...” (Dow Jones Newswire, March 20)
Apparently NOT: The very next day, and every session up till March 26, sugar regained its sweet side, soaring to a one-week high. The U.S. dollar did not stop rallying until March 24 and equity markets continued to close down.
The usual suspects had this to say about that unexpected turnaround:
“Speculators buying sugar as crude oil rose.” (DJ Newswire)
Again, we run into a serious roadblock; namely, there is NO consistent correlation between higher energy prices and a rise in sugar. Case in point: From the start of 2006 to mid-2007, sugar prices plunged head first to their lowest level in two years. All the while, crude’s historic uptrend remained unabated.
By the time my friends and I made it the concert, the band members were packing up their instruments and heading home.
Most likely, those traders who follow the conventional financial experts will not reach a market’s near-term opportunity before it is already over, either.
Fortunately, there is another way: In the March 26 issue of Elliott Wave International's Daily Futures Junctures, editor Jeffrey Kennedy presents original insight and objective price charts, showing you where sugar prices may be headed in the days ahead.
Stay on the right course today via a risk-free subscription; just scroll below for details.