Gold is set to open higher as expected. Corn is set to open lower … not expected and nat-gas looks like it will test its trend-line.
The only position currently open is CORN.
Lower CORN open in the works, crop report due at the upcoming close and price action hugging the lows. We’re at the danger point three days in a row; planning to exit CORN (not a recommendation, not advice).
Taking the markets on the watch list into account, the opportunity appears to be nat-gas, UNG.
If price action contacts the trend-line and begins to pull away, there is a potential confirmation and trade set-up.
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.
Gold (GLD) may rise slightly into the election … then pivot down.
If gold and silver are the safe havens, why have they not moved higher as the overall market has declined?
Years ago, literally decades ago, Robert Prechter proposed ‘it’s all the same market’. Meaning, everything is connected and nothing moves independent.
Sufficient evidence has been proposed on this site, that potential exists for deflation first, then inflation.
Continuing on with Prechter, he states that any significant directional move (major reversal) won’t happen until nearly every market participant is on the wrong side of the trade.
It’s easy to see who is on the (potential) wrong side of the trade for gold and silver. Just one glance at YouTube reveals hoards, buying into the hyperinflation argument.
Sometimes the hoard is correct … but not very often.
Getting back to gold and GLD. An expandable version of the chart is here.
Price action penetrated minor support and generated a Wyckoff spring condition.
This past Friday’s action opened gap-higher and declined to test the support level.
The expectation is for higher action into the election.
How price behaves at the trend-lines shown (if and when contact is made) will indicate whether or not it’s in position to reverse lower or head higher to the 180 – 181, area.
Price action itself decides the next likely course.
Should there be a reversal, there are numerous ways to position (not a recommendation, not advice) for a decline. Inverse funds DUST, JDST, and ZSL are just a few vehicles available.
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.
It’s the heavy hitter. If we decipher what’s going on with it, then we can trade biotech for (potential) profit.
The chart shows price action began to retrace off the lows for the week. In doing so, it created a possible neckline.
The 38% retrace area, marked with the dashed line, also shows it’s a juncture between weekly bars; the circled area.
That’s a trading tip … watch the circle.
If price action gets to 38% and stalls, it shows weakness.
Our interest is to look for shorting opportunities. Specifically, via the 2X Inverse Biotech, BIS.
For years now, except for energy (nat-gas) and commodities (corn, wheat, et al), markets are being worked from the short side.
Steven Van Metre presents an excellent case for a deflationary impulse first before there’s any inflation.
The ‘macro’ as he calls it, provides a backdrop for what’s really going on.
For now, the action (not advice, not a recommendation) is to watch AMGN play out. If the trading is choppy, overlapping and laboring into the 38% level, then we have our answer.
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.
Back in the day, Livermore talked about how he established positions for a directional move … a move that would last days, weeks, or longer.
In his fictionalized biography, Reminisces of a Stock Operator he said words to the effect, take a full size position early; then leave it alone.
We are at the danger point for CORN make no mistake. Price action penetrated previous well established support and stopped dead.
Our initial position (not a recommendation, not advice) was entered about seven minutes before the close on Thursday. Doing so, gave an entry that was just 0.04 points from the lows of the day.
The expectation for today’s session was for prices to rise immediately; which they did.
During this session, the initial position was increased by 50% (pyramiding) and the stop left (around 10.10 – 10.18) for now.
The risk of course, is what happens when the crop report is released just at the close on Monday.
It’s not what’s in the report that’s important. It’s the ‘excuse’ to move prices around that’s important.
Of course, we could be stopped out beforehand. Anything can happen.
The weekly chart shows a potential trend line and channel. Downward thrust has dissipated when compared to the last weekly move lower (9/25/20).
The only real negative from today’s session; volume was light.
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 daily chart shows detail of the initial position in CORN. Expandable version of the chart is here.
More info on the Teucrium CORN Fund is here. Essentially, the fund tracks an amalgamation of three corn futures contacts.
Price action mimics, but is not directly related to the front month.
From a trading standpoint, the job of the sponsor firm is to locate two types of market set-ups or their failures (as in the case of GDXJ).
Those set-ups are denominated as a Wyckoff “Spring” or “Up-thrust”.
More detail on Wyckoff can be found here for those interested. It should be noted, Wyckoff is well known in the industry but kept close to the vest.
Back to CORN. The actual physical stop is not determined at this time. The pre-market bid/ask spreads indicate a higher open for CORN.
If CORN penetrates the prior session’s daily high, the stop will be set a few ticks below at that session’s low (~13.18).
Fundamentals are in favor of continued higher prices:
Record (and earlier than normal) cold moving into the growing areas.
Weather anomalies (inland hurricanes) and spontaneous combustion of grain silos are all part of the picture.
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.
It’s been a while since wheat and more specifically, WEAT has been covered.
The potential hyper acceleration from the last report has not materialized … yet.
What we do have, is price action setting up for a potential trade.
Well established support is shown along with the location of the 38% retrace area.
Next crop report is due out on Monday, the 2nd, but here’s the catch. The report is to be released at 4:00 p.m. EST; just as the regular session is closing.
It should be noted at this point in time, what’s in the crop report is (and will be) essentially meaningless.
We’re focused on price action and that alone.
Fundamentally, we know that around 10% of the corn crop was destroyed by the Derecho. Earlier than normal record cold weather has moved into the crop producing areas.
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 JDST trade, discussed over the past several weeks has been closed as of today.
Price action in the Junior Mining Index, GDXJ, declined sharply during the day but failed to decisively penetrate support at the 52.00 area.
Combined entry price for three separate JDST entries (9.98, 10.38, 10.58) was 10.19. Exit price was 12.09.
Since the short trade was executed with the leveraged inverse fund JDST, we’re not going to wait around to see what happens next.
Inverse funds have a habit of ‘blowing up’ as happed with this exact fund just a few months ago.
These vehicles are absolutely not for the novice and even the experienced pro can get impaled on them every now and then.
In fact, the last substantial trade in JDST was closed out on March 12th, 2020. That exit was just two days before the fund had its monster disconnect. Enough said.
On a separate note; because of the price action and position of NEM, it’s now in Wyckoff spring position. It thus has the potential to move higher from 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.
Pre market activity (8:31 a.m. EST) has TLT trading up +0.74, at 161.29, which is above the target level set in the last update.
We’ve already laid the groundwork for the ‘speculator’s’ short position in bonds as the largest in history.
It’s the ‘commercials’ that know their markets and in this case (according to Steven Van Metre), the commercials are the banks.
Isn’t it interesting. The banks always get their money, right?
Well, that may be about to happen now, as well.
Just a quick digression from today’s update and concerning the Van Metre link above. At time stamp 14:29, he shows a Wyckoff accumulation schematic. Nice.
From a trading standpoint, there are leveraged bond funds such as TMF (not advice, not a recommendation).
However, this firm has never traded that vehicle and is choosing to be short the junior gold miners (JDST) as well as long natural gas (UNG) for its current positioning.
Natural gas (UNG) for a seasonal trade … with some potential supply disruptions thrown in; the Junior Gold Miner short position (JDST) to work the ‘deflation’ side of what’s going on.
Reports here and here, provide documentation on the thinking behind those positions. Searching for UNG and JDST will give the full gamut of research.
Back to the markets. If we’re doing our job right and there’s a huge down-draft, we’ll already be in position to profit as a matter of course.
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.
The Danger Point® 