This is a three-wave correction labeled A-B-C in which…
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Let me go ahead and show you a sample of our commodities’ analysis and it has to do with lumber.
Setting the stage, this news item gives you an idea of what the prevailing sentiment toward lumber was in mid-February 2022 (Newsweek, Feb. 16, 2022):
The trends driving lumber prices higher will not go away anytime soon.
… Futures markets suggest that lumber will remain above $1,000 per thousand board feet through September 2022.
As you know, there had been a post-pandemic surge in housing demand at the time, which many observers believed would support higher lumber prices. But as Elliott Wave International has pointed out many times, investors cannot count on “fundamentals” as a basis for forecasting financial markets. Instead, we closely watch Elliott wave price patterns.
Indeed, on March 4, 2022, our Daily Commodity Junctures (now rolled into our premier Commodity Pro Service) showed this long-term chart of lumber prices:
In the upper right of the chart, note the wave B of an Elliott wave zigzag. This is a three-wave correction labeled A-B-C in which wave B terminates below the start of wave A, which you can see in the middle part of the chart toward the bottom. Also note the downward pointing black arrow on the right, which signified our forecast for lower prices.
This next chart shows you that indeed, the price of lumber declined dramatically. Lumber peaked in March 2022 and crashed 70% into May 2023.
Of course, no method of market forecasting is perfect, yet the Elliott wave method can be highly useful because it’s based on the repetitive patterns of investor psychology.
Learn more by accessing our special free report, “5 Insights to Help You Manage Risk and Maximize Opportunities in Commodities,” which also discusses sugar, cotton, cocoa and commodities in general.
Just follow the link below to get started.
Commodities: Stay Ahead of Major Trend Changes
Our special free report “5 Insights to Help You Manage Risk and Maximize Opportunity in Commodities” helps you do exactly that – anticipate what’s next in key commodity markets.
As the introduction notes:
Step by step, this guide will show veteran investors and newbie traders alike how to master this opportunity-laden sector.
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