Over the past few weeks, several of the biggest "supernovas" in the commodity universe have turned into falling meteors. To wit: From their respective February peaks, the alleged "grain king," wheat, has plunged 12% while the food forerunner, sugar, has soured to a near two-month low.
And, according to a February 25 article, the biggest of the big commodity investors have had their hats handed to them, big time. The column reads:
"Hedge Funds Leading Exodus From Agricultural Markets. [Long] speculators are slashing bets in the US from almost the highest levels on record after grain prices slumped... If I am the hedge fund manager, I'm getting killed on the long grain positions. Some funds definitely had a harrowing moment. There were some nerves on edge." (Bloomberg)
Who could blame them for being anxious? By all conventional logic, the reversal in grain and food prices is an illogical event of astronomic proportions. In fact, right up to the reversal in wheat the mainstream experts saw the sector's fundamental stars lining up in shape of one specific constellation: the Taurus, or bull.
There were plenty of "fundamental" reasons to be bullish: from floods and cyclones in Australia, to a record-setting drought in Russia, to a Snowmageddon cold snap in the mid-western U.S.'s wheat belt. Everything in wheat's backdrop pointed UP.
"Food, Glorious Food!" began one January 31 Barron's. "Long-term bullish trends are solid for a host of agricultural commodities."
Now, while the "fundamentals" were setting the stage for an uninterrupted bull run, our Elliott wave analysts saw that a reversal in prices was near. In the December 2010 Monthly Futures Junctures, EWI's chief commodity expert and Futures Junctures Service editor Jeffrey Kennedy kept subscribers on high alert for a turn in early part of next year. In the December Monthly Futures Junctures, Jeffrey offered this timely insight:
"What we witnessed in commodities this year begs the question: Will they continue to advance? In many, wave patterns indeed argue for additional rally into the first quarter of 2011. Even so, these commodities are still very mature within their Elliott wave progressions, especially the high flyers. This means that the upside is limited and that the next significant move will be down. Examples of a few of this year's high flyers are sugar, cotton, and wheat."
Flash ahead to today, and the speculators' "exodus" from commodity markets comes as no surprise.
So -- the next question is: Is the recent reversal in high-flying commodities a brief detour on the way to higher highs? Well, on Friday, February 25, Jeffrey Kennedy published a brand-new Monthly Futures Junctures that answers that very question.
On pages 1-4, Jeffrey revisits the shining sugar star to reveal why years ending in "0" and "5" are at the top of his watch list. Then, on pages 5-10, Monthly Futures Junctures' "Wave Watch" shows you two Elliott wave labeled charts of 12 biggest commodity markets, each with a clearly marked price target and bold arrows pointing prices in their next likely direction.
There is more. Futures Junctures Service subscribers can now open the "Traders Toolbox" tab at the top of the daily homepage and instantly watch the 2011 Commodity Outlook Webinar narrated by Jeffrey Kennedy himself.
This 1 hr. 24 min. video presentation provides what Jeffrey calls "the big, big, BIG picture in commodities."At the very start of the webinar, Jeffrey shows you 100 years of commodity price data going back to 1897 -- a chart that puts the degree of trend of the commodity bull market since 2000 into stunning focus.
Following this eye-opening introduction, you then get Jeffrey's 70+ slides showing you the near-, and long-term trends underway in 15 key commodity markets.