As the lines on your computer screen continually flash red across a large scope of the commodity markets, some of you are probably thinking: "What in holy heck happened to the 'safe-haven' premium of this sector?"
It's a fair question. Unfortunately, the mainstream pundits don't have a good answer. "We didn't see this train wreck coming," admits one expert in the cotton market. "We missed the outlook by a mile." (Delta Farm Press)
And -- "It's not a bit of wonder that investors are nervous. Not one academic, corporate leader, or other person of note has effectively and coherently warned about this crisis… I don't recall a single 'think tank' or university being able to state coherently what is happening in the interrelated commodity finance and debt markets." (AP)
We beg to differ. There was "one" person of note to effectively warn about the downward synchronicity between commodities and the entire financial family as a whole: Elliott Wave International founder Bob Prechter, to be exact. In a May 17, 2004 Barron's interview, Bob Prechter drew out the blue-prints for an "All the Same Market" scenario and wrote:
"Liquidity is everything right now and it is driving the prices of ALL investment classes. [Financial assets and hard assets] have been going up together, and we think that when liquidity contracts, they will go down together. This outcome happens only at rare times in history, when a society-wide credit expansion reaches its zenith and social psychology changes from expansive to defensive. The resolution of all of this is likely to be a credit contraction followed by a drop in most asset classes."
Flash ahead to today. The coordinated breakdown of commodities right alongside stocks has arrived. And, contrary to the go-to-go guys/gals of Wall Street -- NOW is not the time to sit on the sidelines bemoaning the widely unforeseen loss of the bull. It is time to jump into the ring and take advantage of the near-term twists and turns of the bear.
For that, the March 6 Daily Futures Junctures "Weekly Wrap-up," is on the job. In this 38-page package, Elliott Wave International's chief commodity analyst Jeffrey Kennedy presents 35 original price charts of over a dozen commodity markets.
And these are no ordinary charts: Each one is clearly labeled with Fibonacci-calculated down-and-upside targets, critical support and resistance levels, parallel trendlines, wave patterns, and bold arrows pointing prices in their next probable direction.
After just one look you will be light-years closer to knowing where the following markets may be in the days ahead:
Crude Oil: Two days. Two very different headlines:
· "Oil Rises Above $44 DESPITE grim US economic news." (Bloomberg)
- "Crude Oil Prices Lower on worries that continuing bad economic news means that demand will continue to decline." (AP)
"Weekly Wrap-up" narrows the next move down to one.
Copper Shines: The December 26, 2008 Daily Futures Junctures "Weekly Wrap-up" set the stage for a strong rally well above the $1.50/pound level. Since then, the red metal has been red hot with prices soaring to a three-month high.
The new "Weekly Wrap-up" opens the door for a meaningful turn.
Corn "is a petrograin tied to the energy markets; [Crude's collapse] has got to anchor it" -- Reuters. One problem: Corn prices peaked nearly three weeks BEFORE oil hit its all-time high on July 11. "Weekly Wrap-up" gets the story straight.