Look What’s “Leading the Economy Lower”
A big “break” in this index is “now in progress”
by Bob Stokes
Updated: March 12, 2020
Most people have a general idea of what is meant by the word "commodity," but let's get specific and provide a few examples.
Crude oil is a commodity. So is coffee, orange juice and wheat. Metals like gold, copper and nickel are also categorized as commodities.
All in all, the Thomas Reuters/Core Commodity CRB Index -- a commodity futures price index -- is comprised of 19 commodities.
Well, this index has not been performing so well.
Let's first take you back to October 1, 2018, when the index had been in a bit of a rebound.
On that date, The Elliott Wave Theorist said:
Wave Down Due in Commodities
Since that forecast, commodity prices have substantially declined.
Our just-published March Elliott Wave Financial Forecast shows this chart and mentions what happened after the Theorist's forecast:
Two days [after the Elliott Wave Theorist's Oct. 1, 2018 commodities forecast], the CRB index made the countertrend high shown by the arrow on the chart. The Theorist called for a break to new lows in a wave of Primary degree. That break is now in progress. In time, it will complete the commodity bear market that started nearly twelve years ago in 2008.
"In progress" indeed.
The March Elliott Wave Financial Forecast published on Friday, March 6 and on the next Monday, a historic crash occurred in the crude oil market (Bloomberg, March 9):
Oil Plunges Most Since 1991...
In a single session, crude prices fell nearly 25%.
In our flagship Financial Forecast Service, EWI's analysts provide in-depth analysis of whether or not the current price action of commodities really portends dark economic days ahead.
Get the full story with our risk-free trial. Simply follow the link below to get started.
Countertrend Price Moves Can Trick You
So, to see them for what they are, prepare ahead of time.
The first step is to learn the main trend. Hence, opposite moves must be countertrend.
Elliott wave analysis identifies the main trend – plus, it indicates high-confidence price levels for the start of countertrend moves, and in turn, their completion.
This applies to all widely traded markets – like stocks, bonds, gold, silver, currencies, oil, etc.
As you no doubt know, volatility in financial markets is back in a BIG way. So, now is the time to learn what our Elliott wave experts are saying about chart patterns.
Follow the link below to get started with our risk-free trial.
When the trend turns in major stock indexes, a curious thing often follows: certain traders think the old trend is still unfolding. In this video, EWI's Brian Whitmer shows you exactly how this happens and why it's so dangerous.
Our July Global Market Perspective notes that there has been a "distinct relationship" between two economic / monetary indicators over the past 20 years. The annual change in one of them has "collapsed." Learn what our global analysts expect for the other indicator "over the next 18 months or so."
Yes, you've learned the "theory" of Elliott waves. Now comes the hard part: real-market application. Watch our Trader's Classroom editor Jeffrey Kennedy share with you two practical tips. (Stocks in focus: NAV, MRVL and TSLA.)