Variety Is the Spice of Life… except when it comes to the range of opinions regarding where a certain commodity market may soon trend. In that case, ONE is the "onliest" number you can ever do.
Yet, when it comes to mainstream analysis, the fundamental analysis experts often dish out more choices for a market’s future direction than a cruise ship buffet table. And the more you take in, the worse you feel.
Case in point: These recent news items on the subject of Live Cattle:
“Beef futures inched upward despite sluggish demand.”(FXstreet.com) -- VS -- “Live cattle prices are in the process of moving into a whole new trading level. Supplies of finished cattle are going to ‘get real tight’ just as demand is increasing.” (Inside Futures, IL) -- VS --
“There appears to be further delays ahead in the resumption of Asian beef exports. I would expect to see further erosion in the beef market as we get closer to the long weekend.” (CattleNetwork.com, KS)
“Cattle firm on depressed CBOT corn futures.” (Dow Jones Newswire) -- VS -- “Cattle purchasing intensified in response to CBOT corns’ sharp run-up.” (DJ Newswire)
Any questions?
Now for the alternative, as described by Elliott Wave International’s commodity expert Jeffrey Kennedy in his May 22 Daily Futures Junctures: “If you give ten Elliotticians the same price chart, if all ten are applying the Wave Principle correctly, then ALL ten will at least be on the same side of the fence.”
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Right away, Jeffrey proves his point by presenting you with two price charts of LIVE CATTLE. Though labeled with different wave counts, both charts agree on whether the market’s rally from the March 29 low is an “Impulse” or “Correction.”
Impulse: Five-wave pattern that moves in the same direction as the trend of one large degree. Wave four does not enter the price territory of wave one; wave two never moves beyond the start of wave one; and wave three is never the shortest.
Correction: These three-wave formations are "point at which the outflowing river meets the incoming tide." They move against the trend of one-larger degree.
In Jeffrey’s own final words from the May 22 Daily Futures Junctures: “Regardless of how you identify the internals of the recent advance in live cattle, we ALL should be viewing this move” in the same way, leaving little question as to where the next big move will go.
*You get a free copy of Prechter and Frost's classic, Elliott Wave Principle – Key to Market Behavior,with a risk-free subscription to Daily Futures Junctures