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Northwest Iowa | Corn likes to move in .22 (or increments of that number)legs or waves once it gets going. Feb is extremely unlikely to mark a high for the year and we will "lose" the crop several times before harvest. On Elliot Wave, the market is just stuck in a broad sideways pattern and likely is a series of A-B-Cs both up and down. For now, corn is trying hard to close above previous highs. Impressive if it gets it done. There will come a time when we can see a more definitive Elliot pattern. Lots of rules with Elliot Wave, similar to Andrews. Wave 1 up will be deeply retraced for wave 2. A target for wave 3 to double the 1st wave and add that to the original low. Wave 3 is usually the longest but cannot be the shortest. Then look at the chart to see if that is a terminal area, previously. Wave 4, in an ideal world, is choppy and sideways. The final wave 5 is many times an average of waves 1 and 3. Dojis always get my attention but I like the shooting star- above the previous action with an open and close at the same price. Reversals, whether a doji or a Key reversal have some finer points to consider to make sure they are valid. Heavy volume is the first. A sharp decline of open interest is second. Follow through is absolutely paramount. Closing price reversals can happen frequently and deserve attention. True Key Reversals are very rare. Just a comment-- While we lump the funds under one heading, there are hundreds if not thousands of them. They do not all follow the same indicators to buy or sell. Kinda like farmers. We all have different views of fundamental and technical signals along with different cash flow needs, etc. Harvest is likely one of the more universal sell times (resulting in normal harvest lows) while a higher % of famers and landlords deliver grain and transfer ownership to merchandisers. Last fall's low for corn came earlier than normal (Sept 1). Why? My theory is there was a lot of delayed price corn that was transferred to elevators. The elevator owned the corn then but had to hedge it up. Most of the DP was up on Aug 31. Elevators then could pull the hedges they had on and transfer ownership to feeders, ethanol plants, etc. I suppose I'm wrong on that one but just trying to pull it all together. Seasonally, we expect a Feb low in corn and oats. Soybeans get thrown in there but not as reliable. Wheat is harvested somewhere in the world every month. Did corn mark the Feb low on the 1st? Possible. Hogs should be watched for a possible intermediate top starting next week. Valentines day. Lent is late this year so that may be delayed. | |
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David ecpa
