This chart is a daily of the September Dow Index. As you can see, its at a critical point here.
In just the last 3 weeks, we’ve rallied 959 points from the June 24th low at 14,474. Last Friday’s high was 15,433… 15,438 on May 28th…..15,448 contract high on May 22….. If we can SETTLE above 15,530… I believe there’s a 70 to 80 percent chance we trade up to 15,800.
However, my position has not changed. Short, with a buy stop in case we take another leg up.
After a 959 pt rally in just 13 days, I think its over extended. I’d be looking for at least a 365pt sell off, down to the 15,123. If they get after it, we might even get a 15,000 print or a sub 15,000 trade.
Here’s a chart breaking it down.
In about 45 minutes, once the grains are open, I’ll cover those trades.
The managed funds sold 40K bushels of corn, wheat, and beans last week.
They are net short now 56K bushels of corn. This is the first time they have been short since December of 2005..
They are long 120K beans.
They are short 50K Chicago Wheat.
If they are right, they won’t let this market breath.
If they are wrong, the short covering rally could be severe, and we could see CZ run back up to the top of that Channel.
It all rests in the weather forecast. Right now its for lower than avg. temps and better than average rain.
In the next 2 weeks, 50% of the corn will be pollinating. If we don’t turn up the heat and shut off the rain, yields could be much higher than any bull could have imagined.
CER