Stock Index Video PART I/III
by WaveTrack International| June 24, 2019 | 5 Comments
PART I – STOCK INDICES
Includes Elliott Wave Analysis of U.S., European, Asian and Emerging Market Indices
STOCK INDICES – MAY’s CORRECTIVE DOWNSWING SET TO CONTINUE LOWER FOR REMAINDER OF 2019!
U.S. Stock Indices Set for Concluding Downswing into Year-End – European Indices Continue May’s Correction – Rapid EM Decline due to Resurgent US$ Dollar – Asia Follows EM’s Lower
We’re pleased to announce the publication of WaveTrack’s mid-year 2019 video updates of medium-term ELLIOTT WAVE price-forecasts. Today’s release is PART I, STOCK INDICES – Parts II & III will be published during the next month.
• PART I – STOCK INDICES
• PART II – COMMODITIES
• PART III – CURRENCIES & INTEREST RATES
EW-Forecast Review – H1 2019
The Annual 2019 report published last January (2019) highlighted several main points. Contrary to consensus Elliott Wave and Economists’ opinion, the U.S. secular-bull uptrend remained in upward progress. Primary wave 5’s advance began from the ‘financial-crisis’ lows of 2008/09. Subdividing into a five wave pattern of intermediate degree, (1)-(2)-(3)-(4)-(5), wave (3)’s peak ended in early-2018. Also wave (4) was approaching a major low [we now know this ended into the late-December ’18 lows]. Finally, wave (5) would then begin one additional but final advance to record highs, but lasting the next several years targeting benchmark S&P 500 levels towards 4397.45+/- (that’s +52% per cent higher than today’s closing levels!!).
The ‘Inflation-Pop’ event first hypothesized back in early 2010 illustrates how central banks have inflated the price of things, stocks, bonds and commodities since the end of the ‘financial-crisis’ of 2008/09 in an attempt to prop-up economies to prevent them from imploding into a deflationary cycle.
With some certainty, derived from cross-correlation studies with European and Asian indices, U.S. markets are set for some extraordinary advances over the next few years. Positive correlations with mainstream commodities like Copper and Crude Oil support this forecast which is also backed-up by Elliott Wave pattern development in Emerging Market indices.
Main Theme’s & Drivers
There’s no doubt that U.S. trade policy led by President Donald Trump’s intention to reverse the 30-year decline of industry and manufacturing has led to protectionism and a potential trade war with China and most of its traditional allies. As a result trade tariffs with China focusing mainstream commodities and products has recently morphed into a technological trade war with China’s Huawei specifically targeted and China’s retaliation by banning exports of essential rare-earth metals.
Economists are continuing to remind us that an inverted yield-curve is signalling the onset of a recession. And more recently, international agencies like the International Monetary Fund (IMF) have warned that trade disputes will cause a drop of -0.5% per cent in global growth. So far economists are falling over each other to be first in downgrading their own growth targets.
The geopolitical environment is also fragile. There are sporadic reports that surface surrounding North Korea’s reactivation of nuclear facilities, U.S. pressure over Iran’s announcement that it intends to withdraw from the 2015 nuclear deal and tensions surrounding access through China’s ‘nine-dash’ demarcation line marking territorial waters in the South China Sea.
Despite these negative events, Elliott Wave analysis points towards the continuation of stock markets uptrends over the next few years. That just wouldn’t be possible if some geopolitical event was to trigger a military confrontation, or even a war – or perhaps some other exogenous event that hasn’t emerged so far – which means there’s a bright future ahead, once the short-term effects of a trade war and geopolitical tension are put aside. But what about the short-term implications of these current events?
What Next H2 2019?
The lows of December ’18 turned the corner for U.S. indices, ending 2018’s counter-trend declines – but not all global indices ended in similar fashion. European indices put in important lows but there are some Emerging Markets and Asian Indices where 2018’s corrections remain incomplete. These are set to extend lower into the second-half of 2019, already visible in January’s annual 2019 report. These up-coming declines are expected to drag U.S. indices lower in H2-2019 lasting until September/October. But as January’s forecasts anticipated, these declines would eventually give way to the next major uptrend.
Emerging Markets + Asia – Australia – Japan
Emerging Market indices offer revealing insights into future price direction, both in the short-term and the larger outlook over the next few years.
The benchmark MSCI EM index remains one of the key ‘Inflation-Pop’ archetypal patterns in development from the ‘financial-crisis’ lows of Dec.’08. Its advance is taking the form of a primary degree zig zag, A-B-C. Wave C’s final advance set for record highs over the next several years began from the grand ‘Re-Synchronisation’ lows of Jan/Feb.’16.
The advance as primary wave C must subdivide into an intermediate degree five wave impulse pattern, (1)-(2)-(3)-(4)-(5) and our default thinking is always attuned to an ‘expanding-impulse’ type pattern. But in actually fact, the initial 1st wave advance from 2016’s low exhibits three wave sequences ending into the Jan.’18 highs which confirms primary wave C is taking the form of a ‘diagonal-impulse’ pattern instead. The latest Elliott Wave analysis of the 2nd wave correction from that 2018 high remains in focus for the remainder of 2019 and it will have consequences for the major U.S., European and Asian indices too.
New Stock Index H2-2019 Video – PART I/III
This MID-YEAR 2019 VIDEO UPDATE for STOCK INDICES is like nothing you’ve seen anywhere else in the world – it’s unique to WaveTrack International, how we foresee trends developing through the lens of Elliott Wave Principle (EWP) and how its forecasts correlate with Cycles, Sentiment extremes and Economic data trends.
We invite you to take this next step in our financial journey with us – video subscription details are below – just follow the links and we’ll see you soon!
Most sincerely,
Peter Goodburn
Founder and Chief Elliott Wave Analyst
WaveTrack International
What you get!
Contents: 50 charts – 1 hour 56 mins.
• CRB-Cash index
• S&P 500 + Cycles
• Dow Jones Industrial Average
• AAII Bullish Sentiment
• Consumer Sentiment
• Consumer Confidence
• Cape P/E Ratio
• Russell 2000
• Nasdaq 100
• Dow Jones Transport
• Dow Jones Utilities
• KBW Banking Index
• XLF Financial
• XLK Technology
• XLP Consumer Staples
• XLY Consumer Discretionary
• Eurostoxx 50
• Xetra Dax 30
• FTSE-100
• MSCI Emerging Market
• Bovespa
• Russia RTS
• Nifty 50
• Sensex
• MSCI China
• Shanghai Composite
• China Enterprises
• Hang Seng
• Taiwan SE Weighted
• Singapore Straits
• ASX 200
• Nikkei 225
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Tags: VIDEO UPDATE 2019
Nikkei – Watch out for next major decline
by WaveTrack International| May 20, 2019 | No Comments
Nikkei’s 5-Wave Decline from April High Great Proxy for U.S./European Indices – 3-Wave Correction Almost Done! Watch-Out for Next Major Decline!!
Nikkei 225 Elliott Wave Analysis
This short-term look at the Nikkei’s decline from the early-May high of 22505 (futures) is a perfect proxy of the entire scene unfolding in global indices.
Nikkei 225 Index – 60 mins. Forecast by WaveTrack International
There’s a very clear five wave impulse pattern unfolding into last Tuesday’s low of 20765. This pattern is labelled as minute wave a and subdividing [i]-[ii]-[iii]-[iv]-[v]. This is part of the ongoing zig zag downswing that began minor wave e. of the 18-month triangle pattern (more details in our previous Elliott Wave Compass Reports).
Note how the 3rd wave as minuette wave [iii] was the longest wave in the pattern. And how the two corrective waves, [ii] and [iv] adhered to the rule of ‘alternation’. Especially, how fib-price-ratios pinpointed the terminal completion at 20765, i.e. waves [i]-[iii] x 61.8% = [v].
Nikkei Forecast
A counter-trend rally has since begun but already approaching idealised upside targets for wave b towards 21482+/-. Once completed, we expect wave c to begin the next and final sequence of declines.
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The ELLIOTT WAVE COMPASS report focuses on the shorter-term perspective of price development comprising of two online updates per week describing and illustrating a cross-section of market trends/counter-trends for stock indices, bonds, currencies and commodities from around the world. This report is ideal for professional and private clients trading a time horizon of a just a few days to a few weeks ahead.
The bi-weekly EW-Compass report offer short-term perspective for global markets
· Stock Indices
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SP500 and Nasdaq 100!
by WaveTrack International| May 13, 2019 | 5 Comments
REVERSAL-SIGNATURE!! – SP500 and Nasdaq 100 Decline in 5 Wave Impulse from May Highs – Multi-Month Corrective Downswing Underway
Read more «SP500 and Nasdaq 100!»
Elliott Wave – Crude Oil – Are Price Trends Predictable?
by WaveTrack International| April 15, 2019 | 3 Comments
Is Crude Oil predictable?
Anyone connected to the financial markets industry knows just how difficult it is to accurately predict price changes, duration and the amplitude of trends. Billions of dollars are spent annually on research derived from varying models, economic, fundamental analysis, mathematical algorithms and even artificial intelligence programmes. But is there efficiency? Has market analysis really improved over the last several decades since the computer revolution?
It seems that more complex ways are being experimented in order to predict price trends but that hasn’t revolutionised the industry. Most large asset managers employ huge teams to outperform major indices which provide the benchmark for performance. However, most active managers are left either underperforming or are marginally ahead of the game. Consider to add all the twists and turns in a market trend together over a year. This would account to a far greater percentage swing than just a trend that measures its starting point in January and its completion in December. Which means there’s a lot of wastage – inefficiency.
Crude Oil or Forecasting Nightmare?
So, it was no surprise to read a recent report from CNBC which ran its story around a senior research analyst working for a major Oil brokerage company based in London, U.K. The analyst commented in its latest research note that ‘There are so many uncertainties surrounding the oil market that it makes it virtually impossible to predict developments for the rest of the week let alone for months or a year ahead’. The report went on ‘There are economic and geopolitical developments to deal with and these can change almost on a daily basis’. The analyst described oil market conditions as a ‘forecasting nightmare’.
Elliott Wave vs. Fundamental Forecasting
Now I’m the first to be sympathetic. I know just how difficult it can be to predict future price development several months in advance. Many analysts have climbed to fame over one maybe two historic calls. A few names, unmentioned here rose to notoriety during the financial-crisis collapse of 2007-09 but have since faded from view. Yes, because it’s difficult.
Most analysts pick their way through short-term calls which are about 3-5% per cent away from current levels, erratic as that performance may be. It’s a bit like two fleas playing ping-pong (table-tennis) on the back of a dog. Yes, they have some idea of the limits of the balls movement. But absolutely no idea about the direction of the dog.
But there’s a methodology that moves away from the ‘incrementalist’ idea of ‘linear-thinking’ which is better tuned into the concept that markets are non-linear progressions of action/reaction processes – and that’s the Elliott Wave (EW) methodology.
Can Elliott Wave predict Crude Oil?
Our specialisation in the EW model has produced some uncanny market calls over the last 25+ years, across all asset classes. Many cannot be scrutinised as random forecasts because of the sheer complexity of pattern, form, price amplitude and duration employed in that analysis. If you’re a mathematician and understand the probability of forecasting such trends, then you’ll know that to predict something so arcuate would be hundreds-of-thousands against – and if repeated, is so mathematically improbable that the only reasoning would be to confirm that there is an underlying law that is being applied in the process.
So when it comes to Crude Oil analysis, let’s see whether the Elliott Wave model has merits.
The next six charts represent a Track Record of EW price forecasts published in WaveTrack International’s bi-weekly and/or monthly analysis covering the last 3-year period.
WaveTrack’s Crude Oil Track Record
Crude Oil Exhibit 1 – January 9th 2016
Crude Oil – Weekly – 9th January 2016 Forecast
Crude Oil is engaged in a three price-swing zig zag decline that began from the July ’08 all-time-record high of $147.27, labelled A-B-C. Basis Elliott Wave and Fib-Price-Ratio analysis, wave C downside targets were measured towards $25.60-25.26+/-. The price at the time of this analysis was at 33.16 which means it was forecasting a decline of approx. $7.50 dollars but then ending the entire zig zag pattern/decline from $147.27, then staging a reversal to begin a new uptrend.
Crude Oil Exhibit 2 – May 10th 2016
Crude Oil – Weekly – 10th May 2016 Forecast
Crude Oil ended the three price-swing zig zag decline at 26.05, just $0.45 cents from the projected low. Coincidence? Hardly! The price responded not by any fundamental news at the time – sentiment was very bearish then – but it instead responded to the Laws that define price development as seen through the Elliott Wave Principle. Crude Oil was already trading up to $43.47, a recovery of +66% per cent. And not only that, the updated analysis then projected prices unfolding higher but within specific parameters, or conditions – the advance must unfold higher into a three price-swing formation, labelled A-B-C, and amplitude analysis using Fib-Price-Ratios predicted the advance would end towards $75.09+/-, then turn down dramatically afterwards.
Crude Oil Exhibit 3 – August 26th 2018
Crude Oil – Weekly – 26th August 2018 Forecast – www.wavetrack.com
It’s taken over 2½ years for the A-B-C zig zag upswing to develop and only in Aug.’18 is it approaching original upside targets of $75.09+/-, now revised to $78.90+/-. But the pattern isn’t quite finished – a little more upside was forecast from current levels of $68.72 to $78.90+/-. Afterwards, a big downswing would begin with initial targets towards 55.70+/-.
Crude Oil Exhibit 4 – November 22nd 2018
Crude Oil – Weekly – 22nd November 2018 Forecast – www.wavetrack.com
Crude Oil traded up to $76.90 in late-October, ending the A-B-C zig zag pattern that was forecast almost 3-years earlier to $75.09-78.90+/-! The next forecast predicted a decline towards min. $55.70+/-, revised here towards $44.75+/-.
Crude Oil Exhibit 5 – January 9th 2019
Crude Oil – Weekly – 9th January 2019 Forecast – www.wavetrack.com
Price declines continued down to a final low at $42.36, a massive drop of $34.54 dollars or a -44.9% per cent decline. Elliott Wave analysis then forecast a three price-swing zig zag pattern developing to the upside over several months, labelled (A)-(B)-(C) – upside projections were to min. $61.70+/-, max. $66.80+/-.
Crude Oil Exhibit 6 – April 11th 2019
Crude Oil – Weekly – 11th April 2019 Forecast – www.wavetrack.com
Crude Oil ran higher, exactly as predicted, unfolding into a three price-swing zig zag pattern, (A)-(B)-(C) with price targets being reached at 64.79 (April 8th). Analysis now predicts a sharp downswing over the next several months, towards $33.70+/-.
Conclusion
The overall form and price-forecasts presented in these six charts over a 3-year period developed almost perfectly according to the Universal Laws governing the Elliott Wave Principle. Even a casual eye will notice the predictability in price development and its accuracy can only result in one conclusion – an inherent, mysterious law is governing the price development of all financial/commodity/currency markets – if those laws are known, understood, then accurate price prediction is certainly possible
Peter Goodburn is the senior Elliott Wave analyst at WaveTrack International and is the author of the monthly institutional Elliott Wave-Navigator report and the bi-weekly individual investor Elliott Wave-Compass report. For information to subscribe to the annual 2019 VIDEO REPORTS – please click these links: alternatively, details at www.wavetrack.com
PART I – Stock Index Video January 2019
PART II – Commodities Video February 2019
PART I – Currencies and Interest Rates 2019 Video
Dow Jones – Triangle Break-Out?
by WaveTrack International| March 29, 2019 | No Comments
Dow Jones – Triangle Break-Out?
There was bearish divergence between the major U.S. indices during the last month. The Dow Jones (DJIA) peaked on February 25th at 26238 (futures) remaining below since whilst the S&P 500 and Nasdaq 100 stretched to higher-highs on March 22nd.
The S&P and Nasdaq have since declined as intra-hourly five wave impulse patterns into their March 25th lows of 2789.50 and 7290.00 respectively. This, of course, significantly increases the probability they’ve ended December’s larger five-wave uptrend.
Dow Jones – Range-Trading
But the Dow’s range-traded over the last month. At no time has it declined into an obvious five wave pattern to corroborate a larger corrective downswing has begun. In actual fact, the range-trading is consistent with a contracting/symmetrical-triangle pattern – see fig #1.
Dow Jones 30 Index Forecast – 120 mins. by WaveTrack International
It’s not quite finished yet though. The triangle is generally composed of five main price-swings, in this case, labelled [a]-[b]-[c]-[d]-[e] where wave [d] is currently pushing higher – fib-price-ratio measurements project wave [d] towards 25994+/-. Wave [e] would then decline towards 25520+/-, derived where wave [e] unfolds by a fib. 61.8% ratio of wave [c].
If price activity confirms to these next two price-swings, it would almost certainly result in ending the triangle as a 4th wave within December’s five-wave uptrend, followed by a 5th wave break-out to the upside.
A break to the upside wouldn’t necessarily mean a break to higher-highs for the S&P and Nasdaq. Don’t forget, they’ve traded down into five wave patterns already. This indicates they will remain below their existing highs should the Dow break higher. And if the Dow breaks higher and the others don’t. Then a different kind of bearish divergence will occur – swapping roles this time!
More in tonight’s report!
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Institutions – click here
Private Investors – click here
Yield Inversion Coming to an End
by WaveTrack International| March 27, 2019 | No Comments
Fixed Income Service – US3mth Eurodollar-US10yr Yield Spread
Rising expectations of a global recession have resurfaced over the last week. Especially, since the US$ dollar yield curve inverts for the first time since Dec.’07. Back then, the inversion actually began in Oct.’7. Just two months before the stock market peak of Oct.’07 that began the financial-crisis sell-off.
Investor’s perception is that an interest rate inversion precedes a global recession. Although, in a recent research note from Canaccord Genuity wealth management, it says there’s a time lag between the two events. It quotes ‘even if the yield curve inverts…over the past seven economic cycles, the median S&P 500 gain from the initial inversion to ‘the’ cycle peak is 21% per cent, with a recession a median 19 months after the initial inversion. If you look at the previous three most similar cycles, the S&P 500 gains to peak rises to 34% and recession is 25 months later’.
Obviously, there’s a distinct difference between the performance of the S&P 500 and what qualifies as a recession following a yield curve inversion. We know that recessions follow the price action. However, more often lagging by several months. That was certainly the case during the financial-crisis sell-off.
FMS Investors now expect a steeper yield curve by ZeroHedge.com
One of the interesting statistics from the latest Bank of America/Merrill Lynch survey was that fund managers economic growth expectations was actually improving, not worsening over the last month – see fig #1 [courtesy of ZeroHedge.com]. It states ‘growth expectations rebounding…net 25% of FMS investors expect global growth to weaken over the next 12 months, up 22ppt (percentage points) MoM and 36ppt from the low of 60% in January ’19 (which was consistent with 2000/01 & 2008/09 recessions), despite biggest 2-month improvement since Dec.’16 growth expectations still remain v (sic. very) vs. FMS history’.
Yield Inversion Coming to an End
We wonder if lowered expectations of a recession are because the S&P 500 has just traded to a new post-December ’18 high (2866.00)? Most probably, in which case, with the onset of a steep corrective downswing which is forecast developing over the next few months, at least from an Elliott Wave perspective [wavetrack.com], these expectations will most likely rise again, heading back to January’s figure of 60% per cent.
US3months EuroDollar-US10yr Yield Spread – Monthly by WaveTrack International
The long-term chart of the US 3mth Eurodollar-US10yr Yield Spread is fascinating to see – fig #2. It depicts a constant range-trade between +3.478 and -1.410 since the early-1980’s. This covers the period of the yield inflation-peak of January 1981 through to the major lows of years-2012/16. Each major upswing/downswing are labelled unfolding into primary degree zig zags. These are probably part of a multi-decennial triangle pattern, A-B-C-D-E.
The narrowing phase which began wave D’s downswing from the Dec.’09 high of 3.478 has since unfolded into a primary degree zig zag. Labelled as A-B-C where wave A ended an initial decline at 1.083 in July ’12. Using WaveTrack International’s proprietary technique of measuring a zig zag pattern, wave A is extended by a fib. 61.8% ratio to project a terminal low for wave C towards -0.410+/-.
Conclusion
With current levels trading around -0.113, it seems that we’ll not have too long to wait! Soon the validity of -0.410+/- in determining the end of the zig zag and the beginning of a new widening/steepening cycle will be tested. And whether that translates into an S&P 500 downturn sometime into the future is another interesting question.
Find out what WaveTrack’s latest US 10yr Yields forecast is subscribe to the EW-Compass report.
SP500 and 3 Degrees of Trend
by WaveTrack International| February 26, 2019 | 2 Comments
SP500 – Three Degrees of Trend Ends December’s Impulse Upswing @ 2814.00
Read more «SP500 and 3 Degrees of Trend»
NYSE Composite Index + Wilshire 5000
by WaveTrack International| February 20, 2019 | 15 Comments
NYSE Composite Index + Wilshire 5000 – December’s Five Wave Uptrend Tests Upside Targets – Preparing for Counter-Trend Downswing!!
The following is an extract from our Institutional Stock Index Report published Thursday January 17th 2019
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Currencies and Interest Rates 2019 Video Outlook | PART III/III
by WaveTrack International| February 17, 2019 | 1 Comment
Currencies & Interest Rates 2019 Video Series | PART III/III
INCLUDES ANALYSIS ON MAJOR US$ DOLLAR PAIRS/CROSSES – ASIAN/EM CURRENCIES – MEDIUM-TERM CYCLES – LONG-DATED YIELDS US/EUROPE/JAPAN + SPREADS
US$ Dollar Continues Higher into Mid-Year 2019 before 7.8-Year Cycle Reasserts Downtrend – Long-Dated U.S./European Yields Heading Lower until June/July then Resuming Medium-Term Uptrend – Inflation Lower, then Surges Higher until 2021-24
We’re pleased to announce the publication of WaveTrack’s CURRENCIES & INTEREST RATES 2019 video updating medium-term ELLIOTT WAVE price-forecasts.
• PART I – STOCK INDICES – out now!
• PART II – COMMODITIES – out now!
• PART III – CURRENCIES & INTEREST RATES – out now!
CURRENCY REVIEW – 2018
In last year’s June ’18 mid-year EW-Forecast Video, several key CURRENCY & INTEREST RATE events were highlighted –
Read more «Currencies and Interest Rates 2019 Video Outlook | PART III/III»
‘SHOCK-POP-DROP’ & ‘INFLATION-POP’ Explained!
by WaveTrack International| February 2, 2019 | 1 Comment
INFLATION-POP and SHOCK-POP-DROP Explained!
Almost all commodities ended their ‘SUPER-CYCLE’ uptrends around the year’s 2006-2008. We define the super-cycle uptrend not from the 1999 lows as is generally considered in the financial industry but from the ‘GREAT DEPRESSION’ lows of 1932. This is because most commodities reached all-time lows at that time. Even lower than levels traded several hundred years earlier and this provides a strong basis for historical Elliott Wave analysis. The subsequent uptrends from the 1932 lows unfolded into five wave impulse patterns. Consequently completing the ‘Super-Cycle’ into the 2006-08 highs, for benchmarks like the CRB-Cash index, Copper, Crude oil and Emerging Market indices – see fig #1.
CRB Cash Index – Quarterly – Forecast by WaveTrack International
Shock-Pop-Drop – Deflationary Cycle
The SHOCK-POP-DROP is a term that describes how various Commodities, Emerging Markets and other major Stock Indices are unfolding as the ‘corrective’ or ‘balancing’ phase in the aftermath of ending their super-cycle uptrends. In Economics, this is designated as a multi-decennial ‘DEFLATIONARY PERIOD’. In Elliott Wave terms, the same period is designated taking the form of an ‘EXPANDING FLAT’ pattern lasting over several decades, heading into the next major cycle low due in the years 2024-2025. This is composed of three main price-swings. This is composed of three main price-swings, labelled A-B-C. In this case wave A as the ‘SHOCK’ phase, wave B as the ‘POP’ or Inflation-Pop and finally wave C as the final deflationary ‘DROP’ phase – see fig #2.
SHOCK-POP-DROP and Commodities Markets by WaveTrack International
The ‘Financial-Crisis’ or ‘Great Recession’ developed between 2007-2009. It is simply the 1st phase of this multi-decennial corrective price decline that ended into the late-December/early-March lows of 2008/09. This is labelled as wave A, i.e. the ‘SHOCK’ phase.
The post-financial-crisis recovery is the 2nd phase of the corrective deflationary cycle. Yet, this phase is capable of pushing many commodities into new record highs. This phenomenon is not recognised in conventional fundamental/economic or even technical analysis. Because analysts see this as part of the previous super-cycle uptrend. However, the Elliott Wave Principle (EWP) specifically identifies such price developments alongside pattern identification methods as the 2nd sequence of the expanding flat pattern, i.e. wave B.
Inflation-Pop
This 2nd sequence of the expanding flat as wave B can be broken-down or ‘subdivided’ into a three price-swing event. More specifically, an Elliott Wave Zig Zag pattern, up-down-up until prices reach new record highs. We know markets adhere to ‘fractal’ qualities of subdivision and this is a good example. The Zig Zag is therefore labelled A-B-C and given the term of the INFLATION-POP. Mainly because it will undoubtedly trigger a resurgence of inflationary pressures by the time prices reach new record highs.
INFLATION-POP by WaveTrack International
Wave A represents the 1st stage of the INFLATION-POP and wave C as the 2nd phase – see fig #3 [left].
Grand Re-Synchronisation
The 2nd phase of the INFLATION-POP began in January/February 2016 when corrective declines in Commodities and Emerging-Markets formed synchronous lows with major Developed Market Stock Indices. We termed this as the grand ‘RE-SYNCHRONISATION’ lows. This is why significant price rises have since followed. Continuing the secular-bull uptrend for stock markets (see fig #3, right) whilst beginning the next but final phase of inflationary price rises for Commodities and Emerging Markets.
2nd Phase of Inflation-Pop – Base Metals
This second phase of price rises is typical. But it is not exclusively unfolding into five price-swings or waves, 1-2-3-4-5 over a period of several years, into the culmination of the next cyclical peak due around the early part of the next decade, years-2021-24. So far, wave 1 ended its advance in Base Metals having taken two years to develop into January/February 2018’s highs. This has since given way to a period or regression or correction in wave 2. This is a necessary function before prices can resume higher in wave 3 and so on. Wave 2 is currently in downside progress from the 2018 highs, for Copper, and the rest of the base metals group.
The upside progress of the ‘Inflation-pop’ for precious metals is somewhat different. It too will succumb to the gradual build-up of inflationary pressures. However, maintaining it within the overall schematic. Yet its Elliott Wave pattern progress is different to base metals which means it has already begun its next surge higher from Q3-2018, onwards.
Performance Measures – Precious Metals
There exists some alternate long-term bearish counts for Gold and Silver which otherwise depict the end of their super-cycle uptrends into the year-2011 highs. These forecasts can be viewed in the Elliott Wave Forecast database (Institutional clients, please contact us for details). Or via the annual Elliott Wave Video Series (private clients, please contact us for details) – or see these links below:
Institutional Clients please click here
Private Clients please click here
When comparing underlying industrial commodities like Copper and inflationary sensitive measures like Gold with economic driven commodities like Crude/Brent oil, we again see some short-term pattern-dislocation but overall, fitting the ‘Inflation-Pop’ schematic.
Energy – Crude/Brent Oil
Crude/Brent oil are ultimately heading for new record highs as part of the 2nd phase of the inflation-pop. But this isn’t expected to resume until sometime after mid-year 2019. It began this sequence from the grand ‘RE-SYNCHRONISATION’ lows of January/February 2016. However, is unfolding into a seven price-swing sequence which is labelled A-B-C-X-A-B-C, or in Elliott Wave terminology, a double zig zag. The first cycle degree zig zag, or A-B-C ended last October (2018) and is currently being balanced by an ‘X’ wave correction into Q2 2019. Once completed, the next A-B-C zig zag pattern can get underway lasting through to the next cycle-peak due in 2021-22, attaining record highs.
The Deflationary Drop
Looking further ahead, the final phase of the ‘Shock-Pop-Drop’ is the ultimate period when rapid, accelerative price declines unfold. The ‘DROP’ sequence when deflationary pressures exert into the end of the next decade. This will be a ‘generational’ decline. Mainly because it will most likely wipe-out stock market and commodity values by around -80% per cent. Just as it did in the last comparable period which was the Great Depression collapse of 1929-1932. See Copper cycle, fig #4.
Copper – Composite Cycle – by WaveTrack International
It will be a very difficult period for humanity. Both economically and spiritually because it will test us all, throughout our entire planet. But like all things justful, the phoenix does rise from the ashes. And and this no exception – we will rise again. It may take 20-25 years to recover from whatever lows develop, just as it did back in the 1930’s. But what emerges afterwards will resonate at higher frequencies for the generations that follow.
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