Commodities: Is This ETF the Way to Go?
Here’s what followed a 12-year classic Elliott wave pattern
by Bob Stokes
Updated: February 15, 2022
Those who fill up their car tank or buy groceries know that the price of commodities has been steadily climbing even if they don't actively follow the markets.
Focusing specifically on food prices, the federal government says all grocery items rose 7.4% from January 2021 to January 2022. Meat and eggs have climbed in price by more than 13%.
However, in 2020, the Invesco Agriculture Fund (NYSE: DBA) had been in a downtrend which had started some 12 years earlier.
The news had not been good for agriculture. Here are some sample headlines:
- US-China trade war is hurting farmers (CNBC, Aug. 2019)
- Federal aid package 'just too little' to help beef industry (CBC, May 2020)
- COVID-19 hitting California agriculture hard (The Record, June 2020)
Yet, Elliott Wave International has observed that when the news is the worst for a financial market, ironically, that's when bull markets often begin.
That's what happened with the agricultural sector.
On Feb. 5, 2021, our monthly Global Market Perspective said:
Based on the chart pattern of the Invesco DB Agriculture Fund (NYSE: DBA), we are adding it to our list of commodity ETFs in long-term bull markets. The ETF completed a three-wave decline from its 2008 high to its June 2020 low and has since advanced impulsively.
As Elliott wave practitioners know, the completion of a three-wave decline means that a five-wave uptrend is set to begin. Take a look at this updated chart of DBA:
You can see the three-wave decline (labeled circled A-B-C) and the start of the five-wave advance. You can also see where Mark Galasiewski, one of Elliott Wave International's global analysts, made his bullish call. That was when DBA was trading at $16.67. Since then, as of the time this chart was updated, DBA has advanced 26%.
Now is the time to learn where the Invesco DB Agriculture Fund is at present within its developing five-wave structure. This will provide useful insight for you as an investor. It will also help you to anticipate how much longer and higher agricultural food prices are likely to rise before consumers finally see some relief at the checkout counter.
You can get our analysis by reading our Global Market Perspective, which covers 50-plus worldwide financial markets.
Just follow the link below.
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- Robert Prechter, The Socionomic Theory of Finance (2017)
Imagine knowing a financial market's "likely future direction" in any part of the globe -- before (and sometimes despite) any news reports. What an invaluable insight for your risk management!
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