4 Commodities Ripe for Opportunity -- NOW

If You Aren’t Making Music with Commodities, Try This Song Instead
Cocoa's 2016-7 bear market reversal was in total harmony with one kind of analysis

By Elliott Wave International

If financial markets were styles of music, equities, especially the most stable Big Board stocks, are like great classical compositions: They're made up of consistent, steady tempos you could listen to all day with the occasional booming or crashing note.
Commodities are different. They're the jazz players delivering choppy, frenetic tunes with jolting chord changes.
It's easy to write it off as chaos; to believe these markets open every morning as a blank slate, riffing off each other or external "vibes" in the moment. That's the very basis of fundamental market analysis and its reactive claim that outside news events drive price action.
But that's not the only option. Maybe you've heard of technical market analysis? It's based on a closed system of values, such as momentum, relative strength, bar patterns, Japanese candlesticks, and so on -- that provide an objective way to measure near-, and long-term future price trajectories.
A popular choice for market "techies" is Elliott wave analysis. It's incredibly user-friendly, thanks to the fact that there are only five core Elliott wave patterns to remember. One of them is called an impulse wave, defined as a five-wave move in the direction of the larger trend in which:

• Wave 2 never retraces 100% of wave 1
• Wave 4 does not enter the price territory of wave 1
• Wave 3 is never the shortest among waves 1, 3, and 5

Wave 3 is never the shortest because it's usually the most powerful wave in the sequence. Ralph Nelson Elliott himself described third waves as "wonders to behold." Think of the part in a song that builds and builds and then bursts into crescendo (price surge) or quiets into decrescendo (price selloff). That's a third wave.