Dear Members,

Rough Rice CBT

International prices of Rice are due to start higher. Now I have said that for 2 years. Prices did not fall below the 9$ mark much but spent this time forming an ending triangle in wave Z that is the last phase of a consolidation long term. So now that prices have broken out of the wedge we should be well on our way into a third wave for Rice that should eventually go past the wave 1 peak of 24$. The breakout from the trendline is above 13$.

Cocoa CSCE

Cocoa prices have bottomed near the 1880 mark twice before and moved up by nearly 70%. So with the daily RSI showing positive divergences, the monthly RSI developing a possible positive divergence [closing tonight], and from the oversold territory as seen below, chances are we have a bottom in Cocoa longer term. Recently we made a higher bottom in the short term prices move as the first sign of a trend. Cocoa the key ingredient to Chocolate is going to move up again. It could be the start of a 3rd wave for the Long term so this time it may even go higher.

US Steel

I have used the US Steel chart many times [even before the launch of the new site], to state my view on the metals sector. So In Feb of 2016 for the first time I published it here showing the completion of 5 waves down in wave C and thus a bottom in the metals sector. This was against everyday falling metals stocks back home. So more recently we have not seen a big correction in domestic metals stocks even as metal prices have corrected. The US Steel chart shows that the stock went from 6$ to 40$ in what maybe only wave 1 or A of a larger advance. We have seen a correction to 66% retracement in wave 2 or C down. What should then follow is wave 3 or C up next. C=A goes as far as 120. The rising channel below has room till 70$. And we recently bottom near 18.55. Till we hold these lows and this key retracement mark the trend for the metals should again be up. This should be important.

Amazon - AMZN

Don't You Dare this Amazon - but I would not have looked at the chart if it was not all over the news for the new record in price. Now if something is being watched so closely that it does not get missed by all the media it must carry a lot of emotion with it. The chart from the 2015 low marks as a 5 wave rise, where 3<1, and so 5<1 must also be true. The move up yesterday kissed the trendline from the wave 1 and 3 tops. So is wave 5 over. The weekly chart shows us to be in wave v of 5, so this is the final wave in the structure so far. So watch the next turn lower in Amazon closely as it can mark the end of a 5 wave rise and a correction. But that has not yet happened but we could be close.

Even on a Quarterly chart from 2001 it can look like this. Wave 5 of 5 up in progress.

US 10 year T notes

No change here - the rising 10 year notes, meaning lower US yields continue to indicate the short term risk off mode of US markets.

Sugar Ncdex

Local Sugar prices have not fallen yet along with global prices. A parallel line for wave B puts the resistance at 3900. Till we are below it we should still anticipate wave C down. The channel support is at 3625 below which wave 4 of lower degree is at 3350. And if the fall is deeper then 61.8% of the entire sugar rally is at 2775. 

NCDEX Future Index

The NCDEX Future index closed the month near the 40 month average. After a 5th wave it should go still lower in the months ahead back to the wave 4 area near 2119, from 2807 currently. So no early bottom in Indian Agro prices yet.

Dollar Index breaks the 20 Month Average

The Dollar broke the 20 month average today, so I have circled two major reversals that happened after a retracement when the prices went below the 20 month average. Both were followed by a Multi year bear market in the dollar. So we should not overlook the possibility of another US Dollar bear market. This months break should ensure that it is fast and furious. And those who can quickly figure what this major economic event means for all other Asset classes from currencies to equities and commodities and precious metals, and then positions himself, will gain the most in the coming years.

Crude

Crude - is still in wave b down and it is either complete or one last push lower to 47$ will complete it before wave c to 58$ can unfold.

Copper

Commodities have been mixed. Copper below appears stable. So do lead and Aluminium. Nickel still keeps falling and Zinc is seeing deep retracements. Copper is holding the 20dma and the daily momentum remains in buy mode so it is giving positive signs. 2.54 is the 20dma as the support and unless we close below that the next move higher should unfold.

USDCNY

I have flipped from expecting a smaller degree 4th wave or larger degree 4th wave on this contract. This week break of the rising channel from the 2015 low should mean that it is a larger degree wave 4. EWI thinks the larger 3 wave rise is A-B-C, but I keeping the fall a 4th wave till the 23.6% retracement mark near 6.75. Will wave 4 end in A-B-C as shown or continue to form a triangle over many months? We will see. Below 6.75 it would be better to consider more bearish options on the USDCNY.