Watching the current sell off in the Dow. Bottom line, we had a 6-week 1,107 point rally, which largely went un heralded. Have a 513 point pull back however, and the crowd squeals like teen age girls at the sight of Justin Bebier.
We could correct to 10,169 in Dow Cash, followed by a test of 10,000, which would co incide, most likely, with the November Elections. Economic distress would be the trump card if we were to dance through 10,000 round about November 1st. That, more than anything else, should give incumbent Dems the hee bee gee bies… US voters vote their pocket book.
As for the grains, yesterday, on the 50 percent pull back in WZ at 677 1/2 was close enough to the exact 50% retracement at 676. We covered our shorts and actually re owned calls.
A nice rally today, in the face of reports of rain finally hitting the Ukraine confirms, that this is a real supply issues. Egypt looking to Argentina for wheat and Japan coming to the US last night for wheat illustrate that the markets are adjusting to the supply issue.
More interesting, has been the incredible exports for corn this morning coming in at 2.9 MMT; 2.2 MMT of bean export as China has bought beans 9 out of the last 10 days from the US. US exports for wheat last night were 1.41MMT. Will Russia be importing wheat from the US? Quick, someone go wake up Jimmy Carter..
We still have to settle CZ above 4.30 for the week for the next up-leg to open up on the charts. Ditto 10.50 in SX.
Looking at the ZW Dec Wheat in Chicago, we could be headed for a dollar rally in the short term back up to 772 or two dollars higher up to 7.95-8.00
Crude Oil, finally, still looks like it has one more flush lower. I would cover 1/2 of the remaining short position and adjust the buy stop to your comfort level.
Good Trading
