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Northwest Iowa | Do you have a minute? The old trader's(I am one of them) would tell you to never sell a sleeping market. That is one with low volatility and small moves. That fits both beans and corn. In times past I have spent time using point and figure charts. P&F does not take time into account but would record the small fluctuations that have occurred in the past 6 months in beans and year and 5 months in corn. The horizontal count (sideways)would project a number for the vertical or price when it broke out one way or the other. Nothing tells us yet which way we will go- just that the move will be substantial. We were taught that when you have a triangle drawn on a chart, to measure the horizontal length of the triangle. 75 % of that length would be a strong area to watch for a breakout. It could go out at anytime, but the research was that 75% + was most likely. Price projections are derived by using either the length(horizontal count) and adding or subtracting it to/from the breakout point. The measurement to use is the length of the base of the triangle you have drawn. These are just some suggestions to anticipate moves. Andrews has a method that is useful when in a true flat sideways move. Use straight horizontal support (under) and resistance(over) lines. Take the distance between those lines. Count the number of complete swings(both up and down). Use the number derived from the distance X the number of swings. take that number and add it to both the top and bottom for two upside objectives. Then subtract the number from both top and bottom to give downside objectives. I have not seen any others that use Andrews work talk about this. Ideally, we would note rising open interest as time moves along indicating more traders are comfortable holding their positions rather than offsetting each day. All tied to that should be lower margin requirements and a lower option values. There you have your lesson of the day! Keep safe everyone! | |
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