If we look at some fundamentals in the Lithium world, they say that demand is far bigger than the supply, and it is only going to get worse as electric car production grows. When demand is not met, then prices should eventually go into a very bullish phase.
I am sure we could hear about “Peak Lithium” if and when prices soar, but by that time production will meet demand and the Lithium world could come crashing down again. One big news break that the world must make a better and cheaper battery for car and home use, could make lithium obsolete.
You have to do a lot of searching to come up with Lithium news, but this may be one site to look at.
How well the LIT ETF below will track the producers remains to be seen, as I know little about it. It can take years to produce a decent wave count, especially with so little ETF data to go on.
I must stress that this is only my first attempt at creating a wave count. I can move locations very easily and come up with a “D” wave rally as well. We do have a section where many waves overlap, ending on the downward spike.
The problem is that after my wave 3 bottom I have an expanded flat which very often develop in the wave 3-4 positions. If this is true, then this LIT ETF is in a false run, or in EW language, “a bear market rally”. Bear rallies always retrace themselves, so jumping on the bandwagon at this point is dangerous. Chances are good as soon as we jump on the wagon, it is actually getting ready to crash.
Everything could remain bullish, but waiting for a potential swift decline or another clear “ABC” crash would be much better. Of course, then the last decline can be a zigzag as well and still travel to new lows.
At this time it looks like LIT wants to follow gold, so this would be interesting to see if it happens. It may also be worthwhile to start a gold/lithium ratio to see if we can find a high and low extreme.