Last week I looked at the Sep Dec Corn spread which seemed to have bounced too far too fast.
If you sold that spread, cover at least 1/2 of it here with a 10 cent profit. $500 bucks a contract is a good way to start the week.
The stock indexes still seem over sold here to me. All that talk in the last 2 weeks looking for a continued 30% correction was a gift to cover shorts. I have no real opinion on the stock market for now. I could actually see us rallying back to the 15,300 level, setting us up for some type of dramatic move in October, one way or another.
In the grains, we have a weather market. SX has rallied $ almost $2.40 in the past 10 days. The funds are adding to their winning long. They have it on right and last week they added another 50K contracts to their long position in beans.
They cut their short corn position by a half.
The hot and dry forecast will bring in a lot of short covering but more importantly the weak shorts.
I think its a bull trap, but I am not stepping in front of the train. Fold your arms and watch it in the beans.
As for the corn: I have 4.97 and then 5.00 as my resistance count. The sale last week at 4.87 gave us a nice 10 to 12 cent profit after we reversed and traded down to 4.61. Trailing buy stops on that kept us in the black.
So far this AM, I have clients selling CZ at 4.97-5.01 against that big number at $5.00.
I am not getting emotional or married to the short in corn, but I like selling it against the 62% retracement at 4.97 and then the nice fat round number at $5.00.
Gold, finally 🙂 we got our 1400 print. I sold another chunk of the longs. If we settle above 1400 then the next count I have is the 1421 level.
Interesting to see gold and the stock indexes moving higher together. I don’t see that relationship continuing through October. The bubble will burst one way or another.
4.97 is the 62% retracement. There is just a wall of noise between here and the July 12th high at 5.28. I’d sell it, put in stops and not look at it for the next week.
For the bean bulls: We are within ear shot of the contract high back at 14.09 3/4 back in Sep of 2012.
There is a 16 1/2 gap on the charts today from Friday’s high to today’s low. At some point that could be filled. The question? will that gap be filled in 2 weeks or 2 months? If you know that answer, please call me and let me know.
CER