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Northwest Iowa | I was just looking at corn, crude and cattle charts. These 3 are in a wide price range of sideways action. Corn has a triangle that will break out in, probably, a week or so. The computer generated charts are kinda hard to be real accurate, I trained with monthly Commodity Perspective charts that had to be updated by hand daily. The most common breakout spot is 75% of the time from the base to the apex. The base of the May corn triangle is roughly $.36. For ease of figuring, I picked 4.70 as the breakout point on the topside. Add the $.36 to the $4.70 break out says $5.06. That's believable for the May contract. Basis is still painful and that may take some time to get more attractive. Traders will sell against that high as it shows as resistance on the weekly chart. We'll likely have a set back from that area. There is a chance that we'd set back now, but seasonal patterns are mostly higher in this time frame.
Crude had an explosion to the upside and used up a lot of energy for that move. There was a deep drop back that was a "gut check" to see if those that bought had the fortitude (and margin money) to stay with the trade. We could see crude trade back and forth for a while before we see another sustained move. Murray Math would have said the market was trying to get to 100. It went on by as the average trader didn't think it was ever going up and bought on fear (or algorithms).
The weekly cattle chart has a double top near $250. The daily April contract has a gap up near there. That might be a big move for this April contract. I still never have much enthusiasm to be short April Fats in April. Pay attention to the June contract as it many times has trouble holding up. An older fellow told me years ago that the trouble with June cattle was that the last of the yearlings were coming to town along with first of the calves. That may have changed as the cattle are fed much heavier that they used to be.
Just some observations and personal opinions here, folks. | |
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