As we enter a busy time of year, I thought it might be time to review this winters look at corn, and see if there is something in that might give us an idea where corn may be heading in the shorter term.  In the past, we examined Dr. Andrews Median Line rules.  He stated:

"There is a high probability that:
1. Prices will reach the latest ML,
2. Prices will either reverse on meeting the ML or gap through it,
3. When prices pass through the ML, they will pull back to it,
4. When prices reverse before reaching the ML, leaving a “space”, they will move more in the opposite direction than when prices were rising toward the ML,
5. Prices reverse at any ML or extension of a prior ML."

This winter, a fellow NAT poster with a keen eye brought this trendline to our attention.  He noted how it split price, and how price had tendency to gap/zoom through the line.  Upon further discussion of that line, it was found that the reason the line seem to be so "perfect" was because it was center line in a pitchfork so was line anchored in physics, and not "just" another line.

Dr. Andrew's second rule states: "Prices will either reverse on meeting the ML or gap through it."  Upon applying the pitchfork to the confining pivots, it can be seen that price did in fact zoom up, through the Median Line (ML), then later, gap back down through the line.

Later, another trendline was highlighted that showed exhibited similar properties. The line shared the same gap down with the previous Median Line set.

Again, it was found that the line was not just a line, but appears to have been the center line (ML) of a Median Line Set.  

Although not really part of the great doctors rules, what are the common threads in both those median line sets terminating at the gap or zoom?  Each had a major pivot, and after price gapped or zoomed, we could find the farthest point was able to get from the trendline between the major pivot and the gap/zoom.

If we take the points farthest from each trendline, and duplicate to the other side of each trendline, we find that the distance above and below the middle trendline is almost identical.  That makes sense because a Median Line set is measuring the energy expressed in a swing, and projecting it forward into time.  The "B" point of a drawn Median Line set ends up being a measurement of the amount of energy that price said it has.  The "C" point is the exhaustion of the energy stored in the finding of "B",  released in the opposite direction.  And when price crossed of over balance (ML), price in both these instances accelerated.

On the current continuous corn  daily chart, we can draw a median line set on the most recent three pivots.  Applying Dr. Andrew's rules, it can see that price fulfilled easily the first rule.  Then price consolidated around the Median Line, finally zooming through as stated in his second rule.  Since price zoomed the last line, according to Dr. Andrews other rules, "When prices pass through the ML, they will pull back to it," , #4 "When prices reverse before reaching the ML, leaving a “space”, they will move more in the opposite direction than when prices were rising toward the ML", and #5 "Prices reverse at any ML or extension of a prior ML."  Armed with this knowledge, price should travel to the next extension of the ML, the UML.  If price fails to reach the next ML, and instead reverses, price will travel further in the opposite direction.   

In our previous investigations of trendlines that in reality ended up as median lines, it was found that there were a couple similar characteristics that could be used to "estimate" how much energy price has based on the distance price was able to stretch away from the line (balance), and come up with an idea of where balance is, based on the gap/zoom.   The current continuous corn chart shows us these two characteristics that we saw previously, the furthest point price was able to stretch away from presumed balance, and the zoom where price appears to have released.  From the zoom, an estimate of balance can be made, and from there grab the furthest distance price was able to get and duplicate it to the above balance.

It's a dangerous game to play, and requires vigilance for signs that the estimate are wrong.  Biases can sway our thinking in either direction.  But given the information we have today with the zooming of the most recent Median Line sets and the lessons we learned from previous trendline turned median lines, it could be anticipated that continued price advancement should occur.  Worse case scenario, there is a defined set of parameters which if regularly monitored will tell us if something has changed.

Here's a look at new crop corn.....IMHO, its currently stronger than old, and has been reflected in the spreads.

November beans.

Hope everybody has a great spring!