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COMMODITIES OUTLOOK - November 2019 - Forget Up-Coming Recession, Its Almost Done! Base Metals Require One Final Downswing to Complete 2018 Correction – Precious Metals Pinned Below September Highs...

In This Edition: The latest PMI (Purchasing Managers Index) data shows the global economy weakening again in September’s latest data release. The JPMorgan Global PMI which is compiled by HIS IHS Markit declined to 51.2, a three-year low. Manufacturing, Services and New Export Orders all show a familiar theme of declines since late-2010/early-2011. This period of stagnation followed a strong upside recovery in PMI’s from the financial-crisis lows of 30.0 – the peak into 2010/11 was 60.0. In fact, these index swings are the exact template for our ‘’ scenario – they’re portraying the development of an Elliott Wave, A-B-C zig zag pattern, up-down-up across a multi-decennial period – the current levels around 50.0 represent wave B. Looking ahead over the next few years, that’s hugely optimistic, bullish for the global economy because wave C’s advance has yet to lift off, and lift-off it will! The exact timing for this next advance has huge implications for commodities because the ‘Inflation-Pop’ zig zag is replicating for Copper and many other base metals and energy contracts. Yes, there’s talk of a global recession around the corner because of the recent inversion of the yield curve, but basis Elliott Wave analysis and the archetypal A-B-C zig zag, we’d contend that we’ve been in a recession since 2011 because the PMI’s have been correcting lower since then. This month’s report updates the location of commodity price trends within the A-B-C pattern. In actual fact, wave B ended into the early-2016 lows but it’s obviously taking more time for the fundamentals to catch-up which explains why the PMI’s are still in wave B. But we expect commodity price trends to end their 2018 corrections over the next 2-3 months and when they do, surging uptrends will resume.