Inflation Faltering?
This is an update to our previous article titled Relief from Stagflation Ahead dated 14th October ‘21.
Even as the world turns its attention towards the new Omicron strain, ATEC notes that numerous commodity markets had already rolled into corrective waves.
Here we show the Bloomberg Commodity Index (BCOM Index), which registered its peak in early November, way before the recent fears around Omicron.
With the index having completed a five waves progression trend from the March 2020 lows, ATEC can now look for a larger three waves corrective structure to take hold.
For now, we are working with a potential target of around 88ish, the 38% Fibonacci retracement level from its peak. With the previous ascent taking over a year to form, this should also mean the current weakness in the index can take several weeks to complete, taking us into early 2022.
Should this scenario pan out, ATEC thinks it should not take too long for the narrative around inflation to swing towards one of relief. Perhaps this could provide a more supportive narrative for risk markets into the new year.
Have a great December and good luck out there!
