Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
CORN had been moving steadily higher for nearly two years.
Using Wyckoff and Fibonacci, the (potential) top and retrace was identified one week before it actually happened.
The last update on CORN, with chart analysis was here.
Fast forward to this post; commodities pivoted, and appear to be moving higher in relative unison.
So, what happens now?
Teucrim Fund, CORN, Monthly
The ‘magenta’ arrow shows the location of the April post.
Moving on to the right-side, CORN held below support for seven months before pivoting higher.
If the labeling is correct, we have what looks to be a Wyckoff ‘spring’ set-up (not advice, not a recommendation).
That amount of time below support seems a bit of a stretch for labeling it as a ‘spring’.
Has that ever happened before?
Case in point, Netflix
Netflix NFLX, Monthly
Depending on how it’s measured, back in 2012, NFLX, printed below support three-to-five months, before moving higher … in a big way.
With the chart of CORN, it’s unknown if we’ll get a ‘test’ of the breakout (purple oval).
At this point, there’s so much uncertainty in the financial markets as well as commodities, one needs to at least consider the possibility of a ‘test’.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Insane, delusional valuations, high interest rates, no rate cut.
What could go wrong?
Visitors to this site already knew that ‘something’s up’.
Fully documented well in advance of today, was the A.I. bubble reversal, silver reversal, biotech reversal, and commodities like corn and Nat-Gas continuing their sustained decline.
Now the market hysteria is resulting in the typical knee-jerk, ‘flight to safety’ to the bond market (not advice, not a recommendation).
Surely, with all of that, the Fed will cut rates, right?
For the (potential) answer to that question, let’s look at the bond market.
Long Bonds, TLT, Weekly
Already proposed on this site, the Fed does not lead the bond market and interest rates, it follows it (not advice, not a recommendation).
So, what’s this chart telling us?
If the market continues its decline in the coming weeks, TLT price action itself shows a potential for higher bond prices (lower yields).
We’re just over six-weeks away from the next Fed meeting.
Fed Follower?
If the Fed is still a follower, not a leader and if bond (TLT) prices reach the target just as the September meeting is held, then, one would expect a rate cut (not advice, not a recommendation).
Important to note, if TLT gets to the target area, it’s in Wyckoff Up-Thrust (potential reversal) position.
Economic Air-Pocket
If there is a rate cut as a result of the leading action of the bond market and then it reverses to the downside (rates higher), that’s when it would get real interesting.
Correction or crash; we may have to wait until September to find out (not advice, not a recommendation).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Penetrating and holding just below support, we know what that means.
CORN is at The Danger Point®, in spring position (not advice, not a recommendation).
The chart below covers over four-years of price action; within that, we have at least three technical items to cover.
Somebody Always ‘Knows’
First, how does volume in CORN, go from basically nothing, to increasing over 400%, six weeks before, the perfectly timed and positioned (in the corn belt), ‘Derecho‘.
That location is identified as ‘What’s This?’
As Wyckoff said a century ago: ‘Somebody always knows something and that ‘something’ shows up on the tape’.
CORN Fibonacci, 8-Day
Second, is the successive decrease in downward thrust over the past three-years; at this point, nobody’s watching.
All of that brings us to the third technical point.
CORN has retraced to support (blue line) which just happens to be a Fibonacci 61.8%, level; penetrates that support and so far, has stopped dead.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Since Wyckoff analysis doesn’t care about the press, we’ll use it to discern the (potential) truth.
Let’s see how it did in the recent past. The Nat-Gas (UNG) low, was identified to-the-day,link here.
From that post, was this:
“Downward thrust in Nat-Gas UNG, appears to be exhausting itself after a 20-month, bear market.Risk is never zero, but currently appears to be at a low … “
So, it was. Afterwards, UNG bounced near, but never touched that low.
Twelve trading days later (Fibonacci 13 days, from low), it reversed decisively to the upside.
The Same, But Not
On the medium, to long-term, CORN action is the same as biotech (XBI), but opposite.
Instead of an up-thrust two-years in the making, we may have a spring set-up, taking just as long if not longer.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
“What we’re looking for here, is some kind of Jimmy Carter type stunt where corn exports are halted in the name of ‘national security’ or some such thing.”
Corn Tracking Fund CORN, Weekly
Two Fibonacci projections are overlaid on the chart.
First, a simple retrace starting near ‘Derecho’ lows, to highs set during the week of April 29th, 2022.
Second, a counter-trend projection from those highs to the intermediate lows set during week of May 19th, 2023 and highs of June 23rd, week, the same year.
CORN has retraced 61.8%, which is also the 1:1 counter-trend projection. In addition, it’s the measured move from the wedge break.
The market has effectively confirmed the support area.
Oil Goes Negative … And Corn?
Remember that ‘anything can happen’. Oil futures made history by going negative.
We’re in a new construct, a new paradigm, our strategy should match accordingly.
Everyone has their own perspective and plan for the markets; fair enough.
From here, CORN could continue to new, all-time highs.
However, for my accounts, I’ll wait until such time it appears the downside risk is removed as much as possible.
One potential area for that ‘removal’ is the 76.4%, retrace in the vicinity of CORN @ 16 (not advice, not a recommendation).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
In chess, most (if not all) opens and responses have a name:
‘Danish Gambit’
‘Cochrane Gambit’
‘Petrov Defense’
‘Scotch Game’
‘King’s Gambit’
It’s been nearly one year, since discussing a potential corn trading strategy; during that time, the strategy remains in effect (not advice, not a recommendation).
We’re still waiting for a chess move from the ‘other side’.
Keeping in concert with traditional opening moves as named above, we’re going to name our set-up as follows:
‘Potato Head Gambit’
That is, an ‘administrative’ move which temporally puts the corn futures market into chaos. A move similar to Carter’s grain embargo of the 1980s.
The weekly chart of tracking fund CORN, shows us something’s about to happen.
Either we get a breakout … or breakdown.
Teucrium Corn Fund, CORN, Weekly
The ‘Derecho‘ is marked as it was the kickoff to the current structure.
A wedge has formed.
A breakdown puts CORN, at a measured move in the vicinity of 18.0; a breakout to the upside, measures approximately to 38.0.
From a trading perspective, a breakdown is preferred.
Price action pushing lower to the 18-area, puts CORN below well established (support) lows of 2021.
A penetration of those lows would (potentially) put CORN in Wyckoff Spring Position.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
In the weeks and months that followed, dollar updates proposed that because we’re looking at the longer weekly timeframe, ‘any rally is likely to go farther and last longer than anyone expects.’
So now, here we are.
ZeroHedge just acknowledged the obvious, with this report.
At the time of the original dollar analysis, it was (still is) popular to talk about the ‘imminent dollar collapse’.
That (dollar) post was released in the face of overwhelming opposition to any upside.
All of which, brings us to gold and silver.
Gold’s ‘Changing of Hands’
With the passing days and weeks, it looks like the insight of gold (GLD) changing hands (here and here) is proving correct.
It’s not a popular view and it’s sure not getting any ‘clicks’.
However, as we’ll see below, there’s potential for gold and silver to head to much lower levels if not just temporarily.
Gold (GLD), Weekly Bar
The wedge breakdown with measured move.
It’s clear, the 130 area, is an obvious support level.
The sticky part, previously discussed here, what if somehow, gold heads lower after the measured move?
We may have something that looks like this:
If that happens, think of the confusion that would result.
From an ‘oligarch’ standpoint, it makes perfect sense.
We’ll not elaborate on that in an open (unsecured) forum.
However, let’s just say, we should keep in mind, it’s the corn and grain first, then gold and silver (not advice, not a recommendation).
Silver (SLV) projections are similar; potential targets at SLV 13 -14, then, if lower to single digits, around SLV 9.0 – 9.5
Summary
First it was, ‘The dollar’s going to collapse’, it’s ‘Imminent‘ (years ago).
Then, when that did not work out, it was the ‘Silver short-squeeze’ and we’re going to ‘Put it to the man!
Then, when that did not work out, it was ‘Gold’s going to $3,000/oz. in months, not years!’
Then, when that did not work out, it’s now ‘The Fed’s going to seize all your money.’
Ah ha! … We may have some truth but not in the way that’s obvious.
If the typical middle-class individual is maxed-out with debt, having overpaid for depreciating ‘assets’ such as cars and housing, there really isn’t much left in the banking accounts, right?
Retirement accounts … now, that’s different.
Covered many times (scroll to No. 3) on this site is just how easy it is (will be) to confiscate the IRA.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The Danger Point® 