The way I see it, mainstream financial analysis usually does one of two things: Waits around for this or that supply/demand report to provide direction to a seemingly delayed market – OR – cherry picks through the day's events for a “fundamental” reason to explain direction that has already taken place.
Either way, it ends up missing out on the action.
Take, for instance, these recent news stories regarding COFFEE: April 8: “Volatile Coffee Market Puts Most Traders On Sidelines” (Trading Market, CA). (I guess, they'll return when 2008-9 crop is harvested?)
And – April 10: “Coffee Advances On Weaker Dollar” (Bloomberg) If this were true, then long-term price charts of coffee AND the U.S. dollar would look exactly the same, only inverted. That, however, is NOT the case.
Bottom line: Market’s “know” exactly where they are going long BEFORE the latest U.S. Department of Agriculture report, or any other "outside" data, goes public. And nothing confirms this fact like a market that moves AGAINST conventional wisdom. Case in point: In late February 2008, Coffee prices rocketed to a 10-year high even amidst “hints of prolonged rain in Brazil” AND a “surplus of bags” to retail stores.
Yes, the market “knows” where it’s headed, and the job of an Elliott wave analyst is to figure out that direction and price targets before they are met. To do that, think about the popular game show “Wheel of Fortune.”
In the game, the overall word pattern is already established: A few given letters are turned around as starting clues. As more and more letters emerge, the potential arises for certain phrases to fill the whole board. For instance, the vowel “a” pops up in the middle of a three-letter word. By process of elimination, you know that this word can’t be a conjunction OR an article. It could, however, be a verb or adverb.
Well, the same deductive reasoning applies to Elliott wave analysis. For example, Coffee's recent winning streak got started in May 2007, when coffee prices sat at their lowest level in ten months. At the time, the May 14, 2007 Monthly Futures Junctures' “Wave Watch” sectionpresented an unbelievable close-up of coffee. In short, a multi-year wave 4 contracting triangle was coming to an end AND opening the door to a powerful rally to the 180 level – at minimum.
The incredible rally to a 10-year high on February 28 speaks for itself.
And now, the April 15, 2008 Daily Futures Junctures returns to the COFFEE market to reveal when and where the next big move will heat up.
So, what are you waiting for? The phrase is – OPPORTUNITY. And, with a risk-free subscription, you can solve this "puzzle" right now, before it goes away.