March Corn Future (CH0) 02-14-10

I put up a daily chart on corn earlier in the week and thought that now would be a good time to put up a more complete analysis as there seemed to be some interest expressed in this futures contract.  One question I always ask myself when trading is, “why did price stop Here?”.  It reversed just before a price objective that has an 80% probability of being correct.  Upon a further look I find that it did follow the probability, but on a different chart for a different time frame.  I can find no logical reason for this happening, but it has proven to be a truism for me through my trading career.  This is one of the reasons that I use multiple time frames to trade.  Now to corn.

The monthly chart shows that price has gone through the entry price at 3315 and the first price objective for the move down on this chart is 2130.  There is currently downside pressure being shown on the chart.  For price to enter a major move higher it would have to go through 4375 and then the first price objective for this move higher would be 5795.   For the long-term look the cycles indicate and intermediate low at the end of July 2011 and another major low 5-31 2013.  Whether those lows will be at $1 or $15 can not be told at this time.  I don’t know how accurate this will be in the future, but it was right on the numbers for 4/30/2002, 1/31/2006 and 9/30/2009. 

The weekly chart shows that the first price objective for the retracement down at 3502 acted as temporary support for price.  There is currently upside pressure on this chart.  For price to start a move higher it will have to go through the entry price at 3782 and then the first price objective for the move up would be 4093.  The one that bodes well for the move higher is that with all the downside pressure applied to price on its retracement down that price didn’t even come close to the previous low.  Cycles indicate that the next low on this chart should occur around 5/14/2010. 

The upside price movement on the daily chart met resistance at the first price objective 3652.  There is still upside pressure being applied to this chart. but the indicator is trying to roll over and turn down.  We now know why price stopped above the first price objective for the move down at 3423.  It stopped at a price objective on a higher time frame.  Now we know why price stopped on the way up and why found support on the way down.  The lower time frame charts, not shown, show resistance at 3664 and support at 3551.  For price to start a move lower it would have to go through 3606 and then 3555 should act as temporary support.

I hope that this gives you a little better insight as to how I look at things.

March Corn Futures (CH0)

After a large drop in price on the opening this morning price continued its move higher.  There is still upside pressure being applied to all the charts.  Price has not hit the entry price for the major move higher on the daily chart.   On the lower time frame charts price has hit price objectives and there should be some resistance at this level.  This does not seem like a major move higher at this time.  There is a gap above here and that could be filled in the future.  With all the upside pressure on the daily chart there still hasn’t been a volatile move higher.   Right now price has found the entry price for the down move as support.  That happpens at times.  A rising dollar is not good for corn prices.

March Corn Futures (CH0)

Well, price did go up and test the price objectives on the intra-day charts.  The problem was that it happened during the night session.  So, unless you like to trade after hours in the US, you would have missed the trade.  Price still hasn’t hit the EP for the up move on the daily chart.  We shall see how the rest of the day goes after the sharp drop at the opening.

March Corn Future (CH0)

Very little has changed as far as the SPX is concerned and an e-mail showed some interest in Corn.  The grains, the metals and other commodity prices are affected by the value of the dollar so look at a couple of the past posts on the  dollar.  Those of you that haven’t traded the grains because you are enamoured with the E-mini or the metals should take a look here from time to time.  I knew several traders that made an excellent living trading the grains, especially corn and the bean complex.  For those that haven’t traded the grains corn is traded in eighths.  A penny move is worth $50.  A price of 3756 is $3 and 75 and 3/4 (6/8) cents.  There are seasonal factors, planting numbers as well as weather that can affect the price.   As I haven’t done Corn yet I will do three charts.

Corn closed at 3620 up 34 on the day.   There is no entry on either side on the daily chart.  Price would have to go through 3753 to start a longer move higher or 3457 to restart a move lower.  The price objective for the up move would be 4031 and the price objective for the move down would be 3262.  There is currently upside pressure being applied to price. 

The 60 min chart shows that price reached the first price objective for a move higher and found resistance as it should.   There is upside pressure being applied to this chart so the spike down to hit the entry price for a move down is suspect.

 

The 15 min chart shows that price stopped at the first price objective and is ready to move higher.  There is upside pressure on this chart also.  It should try for the next price objective for a second time.  The intra day charts indicate that price should move higher at this time.  No major move will take place until the daily chart shows that the entry price has been penetrated and there is upside pressure remaining on this move.