By Elliott Wave International
On August 25, Elliott Wave International's Commodity Pro Service editor, Jim Martens, saw something in the coffee chart that bothered him.
He showed this chart and told subscribers:
“The bullish outlook stands, but if a larger wave II correction is unfolding, coffee will turn lower from nearby levels. The overlapping rise from 293.25 to a double top near 341.80 could represent wave ((B)) of a flat correction.”
Coffee gapped lower two days later.
On August 27, Jim updated his forecast:
“As warned on Tuesday, the double top represents wave ((B)) of a larger wave II correction: a flat. Wave (C) should exceed the end of wave (A) at 293.25, and wave II will retrace 61.8% of wave I at 273.90.”
What Happened Next
Less than a month later, December coffee reached the 273.90 objective Jim had identified.
From Jim’s August 27 outlook to the target, coffee declined approximately 12.6%.
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This article was syndicated by Elliott Wave International and was originally published under the headline Martens' Coffee Forecast - Switch from Caffeinated to Decaf Pays Off!. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
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