According to conventional economic wisdom, outside "fundamentals" are to financial price trends what clapping is to an applause-o-meter. A positive response from the audience -- loud cheers, a standing ovation, and foot thumping -- makes the meter go up. AND a negative response -- low boos, awkward quiet, and empty stares -- causes it to turn down.
In reality, such is NOT the case. Let's take the Coffee market, for instance.
Back in the summer of 2008, Coffee prices were stronger than a double shot of espresso: By late June, the market was zeroing in on its highest level in four months. And -- with a slew of bullish data on the horizon, the mainstream experts saw java's upside jolt going strong. Here, the following news items from June 20-26, 2008 say plenty:
- "Coffee futures rose on concerns that a winter frost in Brazil, the world's largest producer, will cripple production." (AP)
- "2008 stock levels are expected to fall to their lowest level in 48 years... Any supply-side shock will have a strong effect on prices." (Reuters)
- "With harvest season upon us and demand for coffee remaining strong, there is fundamental evidence to suggest that this market can find room to push higher." (DJ MarketWatch)
As for what happened next, the following price chart of Coffee over the last year sends a powerful message: (Modified from ino.com)
Voila: Despite the barrage of bullish news, Coffee prices took one step DOWN from their four-month peak in a sustained sell-off to multi-year lows before stopping in late December 2008.
As for seeing the drop before it took off, Elliott Wave International's chief commodity expert and Futures Junctures Service Editor Jeffrey Kennedy is front and center. In the July 2008 Monthly Futures Junctures, Jeffrey presented a four-page "Feature" on coffee that included this insight:
After applying "three simple but key concepts to the price chart... the larger trend in coffee is down."
The jaw-dropping, six-month selloff that followed speaks for itself.
Then, in the December 2008 Monthly Futures Junctures "Wave Watch," Jeffrey showed Coffee prices setting up for a wave (4) rebound. And, that has been the market's course ever since.
UNTIL now... A breaking development has occurred in Coffee. And, to address how this event will influence prices to come, the April 22 Daily Futures Junctures has the labeled price charts, in-depth analysis, and live-video accompaniment you can't find anywhere else.
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HERE to get the complete, risk-free subscription.