If I had a nickel for every time I heard the mainstream experts say that sugar prices are attached to crude oil's hip, I wouldn't just have a sizable nest Egg. I'd have the whole darn chicken.
Here, the following news items exemplify the point:
- “Soaring oil a blessing for sugar industry… When oil climbs in price so does sugar as you realize there is a global shift towards cleaner fuels.” (AllAfrica.com)
- "US world sugar prices fell, following the bulk of commodities lower as crude-oil prices eased." (Wall Street Journal)
- "After topping out on June 30, the nearby October contract has fallen amid profit taking in crude oil." (Barrons)
PROBLEM: As the final piece of data reports -- sugar prices hit their recent high on June 30, three weeks AFTER the rally in crude reversed. During that time, oil prices were getting clobbered, while sugar soared to its loftiest level in three years.
As for an alternative view, the July 16 Daily Futures Junctures stands alone. In that publication, Elliott Wave International's chief commodity analyst Jeffrey Kennedypresents five labeled price charts showing exactly what's behind the strong run-up in sugar: A Double Zigzag. This pattern occurs whenever a single zigzag (simple a-b-c shape in which the top of wave b is noticeably lower than the start of wave a) falls short of a normal target and must be repeated in sequence.
To see the "double z" in real-time, check out the second of Jeffrey's sugar snapshots below:
As Jeffrey illustrates on the chart, the most common relationship for double zigzags is that of "Equality." Meaning: The second zigzag travels the same distance as the first. In the case of Sugar, this scenario has been fulfilled, indicating the start of a turn DOWN.
But, as Jeffrey likes to say: "A wave count is only a wave count until it is confirmed by price action." He then reveals exactly what sugar price must do to confirm his bearish labeling.
The sweetest part is: Complete access to Daily Futures Junctures, along with Jeffrey Kennedy's long-term sister publication Monthly Futures Junctures is currently available for the unbeatable cost of $ZERO$. No, that's not a typo. It's the incredible benefit of Elliott Wave International's famous Futures Junctures FreeWeek event.
Set your clocks: The doors of FreeWeek stay open until Wednesday July 22. Exclusive subscriber-only analysis, objective commentary, original price charts, educational videos, and more -- all free.