End Of The Lithium Mania?

I think the hype about Lithium for electric cars and batteries has been hyped for far too long.  Besides, if Apple takes a big hit, the demand for Lithium could dwindle dramatically. There is no way of being completely sure that the LIT bull market is just a big zigzag, but we sure can see a massive amount of shares being traded. Smart money selling to dumb money, would be my best bet.

We have a sharp spike to the upside which can take a very long time to correct. When markets go vertical it can also mean the end of the bull market. This could take a long time to play out as we would have no real support price level we could count on. The best support would be $23, and that could also just be temporary.

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LIT, Lithium ETF Review




This is just a quick review with only a few wave positions picked out. LIT also violently reversed with the Brexit panic attack, but I sure don’t think this bull market is over any time soon. Elon Musk must buy tons of lithium in the future, so production must come up, to crash the price of lithium.  Presently at about $22,000 per ton, they eventually have to bring down the price of lithium as it would make electric cars far more expensive.

This has much further to go, but what shape the bull market will make is still a mystery to me.   I used the 2016 as the major bottom, but that may get adjusted as time goes on.  Last week we saw the exploration companies move up post Brexit, so that is a good sign. 

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Have Lithium Stocks Turned A Corner?

This is just a short posting about what happened to lithium stocks in the last couple of days. I follow a small group of 4-6 lithium and graphite companies in a watchlist, and for many months as a group, they were boring to watch to say the least. I watch with my iPhone in an app, and when they go up, it lights green when they go down they light red. Simple stuff. On Thursday, they all went green at the same time with only one still in the red. 

This is what happens when markets turn a corner from bearish behavior, to bullish behavior.  I was surprised how well they went up so synchronized.  We need more evidence, but it sure looks like the real deal at this time.

The best evidence is when they keep going up as a group, and keep making “ABC” corrections. I saw my first chart of lithium and in the last 6 months or so, (are you sitting down), lithium prices shot from $7000 per ton to $22,000 at present.  A lot of production would have to come online to get that price down. Producers can’t produce if they have no raw source.The little explorers woke up, and shareholder values should go up as well.   

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LIT, Lithium ETF Review

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.  


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