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30 year commodity cycle

As far as the long view I still think this is where we are- on the long downslope shortly after the 30 year cycle peak. Although even very identifiable cycles do eventually fail or morph into something else.

 

Although very clearly humankind is much closer to whatever the finite limits of the planet are than in 1920 or even 1980.

 

And of course as discussed in the credit thread, we have global economic leadership that will maintain liquidity at all costs.

 

Both of those facts are challenging to the thesis.

 

Sooo... if my assertion is to play out it is basically economic/monetary/geopolitical in nature. Which I guess in a sense all of those cycles have been, primarily.

 

 

 

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Re: 30 year commodity cycle

For the chartists, worth noting that on if you take the above chart forward to the present we broke the lower channel line and are, right now, in the process of retesting it.

 

It's a 100 year chart so I'm not too excited about 10 or 20 points, and the channel doesn't draw out perfectly anyway, so I wouldn't want to get carried away.

 

But interesting.

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Re: 30 year commodity cycle

FWIW also.

 

If you look at the linear scaled part of the chart (blue line, the channel is on a logarithmic scale) you can make the following observation.

 

After the 1950 postwar peak, the 100 level became long term support which also, in good E-wave fashion, coincided roughly with the low of the wave 4 correction.

 

Likewise for post 1980 but substitute 200 for 100.

 

For this cycle the 4th wave low was struck in the 2008 crash around 350. I'll submit that the 400 level might be the new 100,200. Very good long term support should exist there, which is far from catastrophic.

 

 

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Re: 30 year commodity cycle

http://www.mrci.com/pdf/cr.pdf

 

CRB data gets increasing thin- the last year's data is basically just dots.

 

But anyway, from an e-wave perspective we have a clear 5 wave down which would indicate that the high will stay in place for quite some time.

 

After 5 down got a classic bounce back to the high of wave 4 down around 600 then back to the 500 low, bounced again. Best expectation is back toward 600 to complete an A-B-C correction then the dowtrend resumes.

 

So, fwiw, CRB is currently 560ish so I'd generally remain a little positve toward the complex for a while, but not permanently.

 

Remeber, tis is a century long chart; even the subwaves can take a year or more.

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Re: 30 year commodity cycle

They are economic/monetary.geopolitical to some degree, for sure.

 

But I think this is also what you're looking at in the chart and why the cycle makes a lot of sense even if you don't buy the specific periodicity.

 

You have a political economy that generally tries to inflate at a controlled rate of 2-3%, sometimes they overhoot, sometimes under. But that monetary inflation doesn't transmit directly and immediately into individual commodities or the aggregagte. They trade for long periods based on their S & D's and comfort price ranges.

 

Then every few decades, you have a period of tightness and everything catches up at once and in the excitement money piles in and even overshoots economic value points. Then some of that late money slowly gets burned off and you settle into a new equilibrium for a long slog.

 

The larger question is whether the same 'ol can be sustained here. Don't know although there was a great deal of anxiety over the economic future in 1980 (with the majority of Very Smart People betting on inflation) and things turned out OK, for the most part.

 

It seems to me that the difference here, if there is one, is that we probably passed peak conventional oil around 2006 and the new sources that are filling in at the margin are much more expensive to produce (and the low MEC, high EROEI oil is only going to continuously decline in share).

 

Which I guess is OK for the thesis- I said that maybe the CRB has a new support level at around 400- still much double the base that held from '82-2002.

 

For farming I guess it is like the old joke about the guy touring hell- "OK, coffee break's over, back in the $%^& for another 5000 years."

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Re: 30 year commodity cycle

PS.

 

Best prediction is that this is an ABC flat correction which in orthodox form are 3-3-5's. This is C so it would should be a 5 wave leg. (Monthly chart being discussed).

 

You can possibly count 4 but 4 could be more complex (see daily chart below).

 

At any rate, upon further review I'm still thinking we'll see new highs but my gut tells me that getting to 600 will be tough. Anyway, just need to wait for 5 up then 5 down of lesser degree before taking any signals to short.

 

If I want to make an argument on that, I'd point to the general rule of similarity between 1s and 5s. 1 was very short and 5 might also be not a lot more than a push to new highs in 5 wave form of lesser degree.

 

3 was a doozy, really a monumental short squeeze across a lot of the complex. That is also consistent with the count- 3s are usually where the punch is.

 

http://stockcharts.com/h-sc/ui

 

Also, given the seasonality wouldn't be surprised to see grains carrying more than their weight on a final rally.  They seem to be in a better position to do so than livestock, softs or metals. Energies, ya never know with geopolitical matters and all but seasonal is positive there as well.

 

One other thing as far as equivalency of waves one and five- in terms of time, 1 took about 6 weeks. This could be kind of a draggy thing, as well- I don't really expect any actionable signal for a while, anyway,

 

For now the trend is up but likely we're late in the trend. The "easy" money's been made in wave 3.

 

What I'd really get excited about is if it took the form of an ending diagonal (overlapping, laboring 5 wave move, typically exhibiting a rising wedge kind of a look), which sounds plausible to me. But you don't get to write the script, just have to take what you can from what it might be telling you.

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Re: 30 year commodity cycle

nox,

you've laft me in the weeds here with the elliot counts.

 

i get the 30 yr concept - looking at wkly crb from your link - made a major low in 6/2012..i can't see the monthly anymore....looks like it's begun another impulse up - so you're saying the impulse up is within a larger a-b-c flat correction or 5 impulse of 30+ yrs --ending diagonal - so would this impulse up since 2012 be a or c, if corrective?

 

sector-wise - believe grains have just completed 1-2 of a 3-6 month timeframe impulse....whether that's in context of larger impulse or correction...not sure---and i think that is what u r saying -- that we could be in a long term 5-end diagonal?...or a, c of larger corrective wave.

 

thanks,

 

 

c-x-1 

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Re: 30 year commodity cycle

going back to 1900 - i can count that we could be starting 9 (up impulsive) or w/in 8 (corrective) of the whole chart.

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