Corn tripped a faint buy signal at 544 5/8 ten days ago, the first since another signaled in May got stopped out a month ago. This is a bull market just waiting for a sign, any sign, that it's safe to exit the lengthy consolidation that has tied traders in knots for the last five months. The rally is not yet impulsive on the daily chart, but we can use the reverse pattern to get long at or below its d=523 6/8, in the 'discomfort zone', since it is bullishly impulsive on the hourly chart. Notice that the c-d leg of the pattern consistently signaled winning 'mechanical' shorts, but that traders would have endured considerable pain before cashing out. ______ UPDATE (Oct 12, 9:49 p.m.): Corn made a very tradeable low at 519-2/8 before leaping to a so-far high tonight at 525-2/8. The trade suggested above could have been worth around $200 if you caught it with a tight rABC. I am holding a single contract myself, the last of four, for a swing at the fences. ______ UPDATE (Oct 13, 4:12 p.m.): No home run this time. I exited the position overnight after the futures went into screw-the-pooch mode for a few hours before plummeting. The realized gain on four contacts was $388. Corn looks like hell, so I won't suggest anything new.
If junk-bond mania is over, you wouldn't know it from the so-far shallow correction of a bull market that recently entered its fourth year (see inset). There has yet to be an impulsive correction on the daily chart, which means that bulls must be given the benefit of the doubt no matter what one thinks of high-yields. A move to new highs would not be incongruous with the sub-2% yields that may lie ahead for the long bond. More on this will be forthcoming in a guest essay by our friend Doug Behnfield, a top financial advisor at USB.
December Corn has erupted with the most powerful bullish impulse leg we've seen in quite a while. This could mean the monster bull move begun from about $5 a bushel at the beginning of the summer has gotten second wind. For now, we'll use the 787^00 midpoint resistance of the pattern shown as a minimum upside objective. If it shows little stopping power, that would suggest more upside is possible to the 868^06 'D' target.
A chat-roomer with some farming experience thinks there's news yet to come about the corn harvest that will push prices even higher. In any event, we should use the 860^2 target of the pattern shown as a minimum upside objective for the near term. Although buyers had little trouble pushing this vehicle through its 802^7 sibling midpoint resistance, yesterday's relapse back down through it suggests bulls may be tiring. You can learn how to do this stuff yourself — and more easily than you might imagine. Click here for a free trial subscription.
The hottest, driest, crop killing-est summer since, practically, the Big Bang has sent corn prices into a parabola. Is rain and cooler weather in the cards? Could be. Look at the accompanying chart and you'll see that, from a Hidden Pivot perspective, this is a logical spot for the bull run to sputter out. Accordingly, camouflageurs are encouraged to short this monster using downtrending abc patterns on charts of 5-minute degree or less. If you fill and survive for a full day, please let me know in the chat room so that I can establish a tracking position for your further guidance. ______ UPDATE (July 20, 2:08 a.m. EDT): Buyers tore through a major top on the weekly chart yesterday, suggesting either that the harvest may be too far gone to save, or that continuing hot weather will further damage crops. I've refreshed the chart to show the extent of the technical damage.
I usually put little store in head-and-shoulder patterns because they pop up everywhere one looks, but the one that Corn has been tracing out for the last year is hard to dismiss. Beleaguered bulls will find little comfort in the specimen pictured, since yesterday's hellacious plunge did not even bring it down to the neckline. From a Hidden Pivot perspective, it would take an impulsive rally exceeding the 'external' peak at 679.50 to abort the pattern. Failing that, Corn's bear market could eventually hit 480.
The March contract, ever so coy, is playing our least favorite song: 'I'll Be C-ing You'. The first pullback 'C' generated a false entry signal at 654.75; the second, an entry at 647.75 that has not yet been stopped out. Still, it is having plenty of trouble getting airborne, since it's been two days since the point 'x' entry was tagged. We have no trade on at this time, nor do I see any likelihood of a subtle opportunity to get long developing soon. That's because the nearest unburned 'external' peak is the very unsubtle one at 679.50 recorded on September 27. Unfortunately, if and when the futures pop above it, the bullish secret will be out.
The 647.75 entry signal for the pattern shown triggered last Thursday, and although there are no subtle "external" peaks left that we can use to establish a low-risk entry point, we can at least surmise that the 688.75 target will be achieved if buyers can blow past its 661.50 midpoint sibling. Accordingly, I'll suggest zooming in on a five-minute chart if and when that last number is closely approached, the better to identify an uptrending abc small enough to carry a commensurately small stop-loss.
Apple shares and March Corn yesterday signaled strong rallies ahead in the same way -- i.e., by slightly surpassing external peaks well to the left. Check out my touts for both, since we'll be looking to jump aboard if the right opportunity should arise.
Bulls tipped their hand yesterday with the little finishing stroke at the end of a nice rally (see inset). Notice how the intraday high at 664.00 bettered the September 28 peak, 663.25, by three ticks. That may not seem like much, but it is sufficient to tell us that buyers are eager to scarf up whatever supply is out there, big or small. With a potentially powerful rally in the offing, we'll resume our vigilant search for low-risk entry spots: either with the trend via camouflage, or against it at p and d retracement targets. We've been successful in recent weeks using both tactics in this vehicle, although we've yet to catch the Big Wave that may lurk on the horozon. Stay tuned!
