Over the last month, 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 20%-plus while the food forerunner sugar has soured to a near four-month low.
And according to a late February 2011 Bloomberg report, 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."
Who could blame them for being anxious? By all conventional logic, the reversal in grain and food prices is an astro-illogical event. Right up to the reversal, in fact, the mainstream experts saw the sector's fundamental stars lining up in shape of one specific constellation: the Taurus, or bull.
You name it: 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 -- the outside forces in grain's backdrop pointed UP.
"Food, Glorious Food!" began one January 31, 2011 Barron's. "Long-term bullish trends are solid for a host of agricultural commodities."
Now, while the fundamentals set the stage for an uninterrupted bull run, Elliott wave analysis timed the reversal beautifully. See, 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 publication, 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 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, right now,
Futures Junctures Service subscribers can open the green "Traders Toolbox" tab at the top of the daily homepage and instantly download the riveting
2011 Commodity Outlook Webinar narrated by EWI's chief commodity analyst Jeffrey Kennedy himself.
This spellbinding video provides what Jeffrey calls "the big, big, big picture in commodities."At the very start of this 1.5 hour-long webinar, Jeffrey shows you 100 years of commodity price data going back to 1897 -- a chart that puts the maturity 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 -- all of which show why 2011 could introduce a "market event reminiscent" of a prior episode in the not-too-distant past of just a couple of years ago.