CORN READY TO CATCH UP?
Long term all the grains violated the 20 day ma on the weekly charts -including corn. They all have violated the 20 day ma on the monthly - except corn. Next they all violated the 100 day ma on the weekly - except corn and bean oil. Bean oil is very close to doing so. Meal is the first to violate both the 100 and 150 day ma on the weekly - not a good sign.This pattern is telling as it suggests a trend and that trend is down. In order for the corn to realign with the other grains in terms of the 20 day ma on the monthly it needs to get under 586. It is trading around 645.
Since corn tends to follow beans and beans are technically in a downtrend, that suggests that corn has some serious catching up to do. Historically that has been the pattern. The only exception was 1996 when corn lead a move.
So many times I have watched corn just "sit there" as beans start a move. It is misleading as corn gives the impression that it will "hold." Eventually it does not. So is that what will happen this time? Unless something dramatic enters the market, that is what the charts are suggesting.
THE MARKET UPDATE is designed to help you combat emotion. How? It is designed to not only help you learn how to trade but also to develop discipline. That is only achieved through a structured approach to trading. By my reviewing technically all the major markets helps you obtain knowledge of the markets. By my giving structured trade suggestions helps you see what discipline and a consistent trading habit requires. Knowledge, discipline and habit help minimize emotion. Also by including the reasons for the trades, you are able to follow and/or compare my work with yours. Or, if you do not have the time, as many don't, you can simply use my guidelines for placing your own trades.
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TRADE ALERTS:
Placement of Trades:
- I do not enter new positions during the night session. I place the orders for day activity only in the morning on globex.
- All trades are good for that day only.
Sell December cattle. Sell 121.60 stop. Protective stop 123.70. Potential projection 117.50.
Reasons for the Trade:
1. The monthly is selling off from resistance.
2. The weekly has a double top.
3. On the daily chart cattle are selling off from the same resistance area (125.00) going back to July.
4. On the daily chart cattle sold off under the 20 day ma today.
5. Today was an outside day that can trigger a signal and market direction.
Sell March sugar. Sell 25.21 stop. Protective stop 26.87. Potential projection 23.00.
Reasons for the Trade:
1. The monthly has a major key reversal top that is still intact.
2. The monthly chart has a sell signal that is still intact.
3. On the weekly chart sugar attempted to rally back over the 20 day ma but failed.
4. On the daily chart sugar kept trying to rally over the 26.00 resistance without success. It sold off aggressively from that resistance today.
5. On the daily chart sugar sold off and closed under the 150 day ma today. It had already failed the 20 and 100 day ma some time ago.
6. Sugar triggered a sell today.
Buy December dollar index. Buy 77.370 LIMIT. Protective stop 76.650. Potential projection 80.000.
Reasons for the Trade:
1. On both the monthly and weekly charts, the dollar sold off to support and held.
2. On the weekly chart the dollar is in an uptrend.
3. The weekly chart appears to be starting a second wave up.
4. The macd is positive on all three charts.
5. On the daily chart the dollar appears to be in the process of a second wave up.
6. On the daily chart the dollar rallied back over the 100 and 150 day ma at the end of October.
7. On the daily chart the recent consolidation held at the 20 day ma.
8. On the daily chart the dollar triggered a buy today.
Sell December mini eurocurrency. Sell 137.050 stop. Protective stop 138.570. Potential projection 132.000.
Reasons for the Trade:
1. The monthly chart has two previous sell signals that are still intact.
2. On the weekly chart the fx is back under both the 100 and 150 day ma. That is very negative.
3. The macd is negative on all three charts.
4. On the daily chart the fx attempted to get back over the 20 day ma all last week without success. That is negative.
5. On the daily chart the fx triggered a sell today.
GRAIN COMMENTS:
DEC CORN: It triggered a sell today and sold off under the 20 day ma. As I have said numerous times, if beans continue to sell off, corn will eventually follow. I continue to see the upside as limited. For one on the monthly chart it is in resistance going back to Jan. 2011. It has a sell signal and key reversal top - suggesting a major trend change from up to down. The weekly continues to fail every time it gets near the 20 day ma and sure looks like it is starting another wave down. If that follows through, corn could go under 600. Keep stops at 666 1/4. Closed 645 1/2, down 10 1/2.Position: Short 646 1/4 (11.9).
Projection: 600.
DEC MINI WHEAT: I covered the position early in the morning yesterday because it should have followed through with the breakout - it did not. Plus the dollar was strong and that would put pressure on other markets. Today the action was worse. It failed the 20 day ma on the daily chart. And for the first time it closed under the uptrend line formed since the Oct. 3 low. It did sell off under it once before but rallied back aggressively the same day. Not so today. The key number in this market now is 612. If it takes that out it will be violating the 150 day ma on the weekly chart. That could be significant since it has been holding that on sell-offs for several weeks. Just watching. Closed 620, down 23.
Position: Long 644 1/2 (11.7). Exit 650 (11.8). Profit $220 (-comm/fees).
Projection: 700.
JAN MINI BEANS: They are quite close to taking out the low made in early October at 1163 1/2. That could confirm the start of another wave down. The situation long term is getting worse. Beans are clearly under the 20 day ma on the monthly chart. On the weekly they violated the 100 day ma this week. Longer term, follow through could bring beans down to 1100. Move stops from 1217 3/4 down to 1212 1/2. Closed 1167 1/2, down 18.
Position: Short 1217 (11.7).
Projection: 1150.
DEC MEAL: It triggered a sell yesterday with follow through today. The new low is 297.90. The fills were not good as it gapped down. Keep stops at 314.50.
Position: Short 303.50 (11.8).
Projection: 290.00.
DEC BEAN OIL: It triggered a sell today. The low today was 50.23. The last low on the daily chart was 49.95. If that is taken out, it should test the contract low down at 48.90. Keep stops at 52.01. Closed 50.52, down .47.
Position: Short 50.88 (11.9).
Projection: 48.00.
MEAT COMMENTS:
DEC HOGS: Stops were reached today. They got a little "frisky" and rallied to 87.10. They then sold off again and closed under the 100 and 150 day ma. So far it appears to be a failed attempt to get back over those two resistances. Long term it has not changed a thing. The long term charts suggest there will be more sell-off. Waiting to short again. Closed 85.75, up .60.Position: Short 86.65 (11.3). Exit 85.75 (11.9). Profit $305 (-comm/fees).
Projection: 82.50.
DEC CATTLE: A trade could be developing. See Trade Alert for details. Closed 121.60, down 100.
SOFTS:
DEC COTTON: Just looking at the daily chart, it appears to have had three small waves down in this consolidation phase. It now appears to be setting up for a rally to set up for another potential wave down? The 104.00 level has been resistance. That is also where the 100 day ma intersects. I don't see anything to do here because, bottom line, cotton isn't doing anything. Just watching. Closed 99.50, up 2.32.JAN ORANGE JUICE: On the daily chart it sure looked like it was starting to form a 1,2,3 top formation. It even started the day by violating the 170.00 support but OJ doesn't give up the fight easily. It rallied and closed over the 170.00 support. What did stop it was the 20 day ma. If this formation has follow through, OJ should test 160.00. Closed 171.05, down .05.
DEC COFFEE: It rallied to the 20 day ma today and stopped. It is trying to hold at the 230.00 support. There hasn't been enough activity on the daily chart to change anything on the long term charts. Just watching. Closed 230.00, down .10.
DEC COCOA: It does not look good for cocoa. It is testing 25.00 long term. Taking that out would not be good. The weekly chart triggered a sell this week. That suggests to me that it will not hold 25.00. If that be the case, it is probably headed for 22.50. Watching closely to short. Closed 25.04, down .66.
MAR SUGAR: I tried to short it. It reached my price at night. I'll try again tomorrow. See Trade Alert for details. Closed 25.39, up .04.
METALS COMMENTS:
DEC COPPER: This one is tricky. Just looking at the daily chart it looks like it is finishing up the correction to a second wave up. That means it should rally. But it also triggered a sell today and closed under the 20 day ma both yesterday with further follow through today. And the long term charts don't look good. The weekly is triggering a sell this week. The latest rally stopped at the 100 day ma and it looks headed for another wave down on the weekly. Copper still looks headed for 300.00. Closed 337.40, down 6.70.DEC MINI GOLD: It could not get over the key 1800.00. It is now trying to hold the 1750.00 support. Long term it still looks constructive but the daily is not giving much direction at this level. A buy signal triggered on Monday was negated today on the daily chart. Gold needs to recover soon. Will it? Just watching. Closed 1759.60, down 32.00.
DEC MINI SILVER: The 35.000 level has become a major obstacle since Oct. 27. So far sell-offs on the daily chart have held the 20 day ma. Based on technicals, long term it is a bear market. Both the monthly and weekly have had two waves down. If it can follow through with a more extensive rally, it would be a rally to short. I suspect that depends on gold as silver wants to sell off. It is just being dragged along with gold. If gold tops, silver could collapse. Watching closely. Closed 34.106, down .255.
ENERGY, CURRENCIES & BONDS:
DEC MINI CRUDE OIL: I tried to short it. It rallied instead today and took out yesterday's high. It is over the 150 day ma and holding. In my last Update I suspected that it may be trying for 100.00. I still see that. On what basis that is occurring is a mystery to me! Closed 97.78, up 2.04.DEC MINI JAPANESE YEN: As I mentioned last time the reaction of the yen to Japanese intervention on Oct. 31 sure is different this time versus the same intervention in early August. It has been struggling at 129.00 for three days now. In August it blew right over it and continued to make a new high. The difference this time is that the yen now has about three months of consolidation above it to deal with. It is a heavy weight on the market. In early August that didn't even exist. Watching closely to short. Closed 128.86, up .32.
DEC SWISS FRANC: The head and shoulders bottom was violated on the daily chart. It is now attempting to hold 110.00. It formed a key reversal bottom today so it could be setting up for a rally. The long term charts are not showing much. Closed 110.24, up .28.
DEC DOLLAR INDEX: A huge outside day yesterday triggered a buy today. I could not suggest a trade as the risk was too much. I'll try tomorrow on a setback. See Trade Alert for details. Closed 77.973, down .194.
DEC MINI EUROCURRENCY: A huge outside day triggered a sell today. I could not suggest a trade as the risk was too much. I'll try tomorrow on a rally. See Trade Alert for details. Closed 135.82, up .42.
DEC CANADIAN DOLLAR: It has been in a downtrend since the July high. It now appears to be starting another wave down. It has been struggling to hold 98.00 support for quite some time. That isn't being helped by the fact that the 20 day ma hovers above that and inhibits rally attempts. Just watching. Closed 98.03, up 33.
DEC AUSTRALIAN DOLLAR: I tried to short the aussie. It reached my price during the night session and I missed it as it had sold off too much by the time I normally enter potential trades during the day. It sold off to 100.08 today. Long term it is in a downtrend. Watching closely to try to short again. Closed 100.85, down .17.
DEC 10 YR. NOTES: The sell signal did not follow through. They persist in holding 129.220. They are consolidating. Watching closely. Closed 130.110, down .15.
Position: Short 129.210 (11.4). Exit 130.190 (11.8). Loss $961.25 (+comm/fees).