We rallied 1.34 in corn in 6 sessions, complete with a 25 cent gap on the daily charts in CZ from 528 3/4 to 554 1/2 on the daily charts. This morning’s high was a fresh 2 year high print. Talk continues…the question, “Will this be 2007-2008 all over again?” That old high in corn at 705 looms. A bearish hook on the chart might give shorts some comfort, however, I will be more interested in how we close this week on Friday.
From the low at 454 1/4 on May 12th up to today’s high at 588, 38% back is 537, 1/2 way back is 521, 68% is 505. I think that a pullback to 534 is a good target to get long on a correction.
The old target I had when we settled above 4.30 CZ, which projected up to 5.80 has been reached… Are we pausing before a run up to 625-650? Honestly, I think we will get a 6.00 print this week. That could set off quite a few fireworks if we hit stops there.
As for SX, we rallied 1.52 between the October 4th low at 1041 to today’s new 2 year high at 1194 1/2… 38% retracement fills the gap at 1136, 1/2 way back is 1118, 62% is 11.00.
There is a gap from 11.35 up to 11.50… Gaps are always filled. Eventually. Of course we may have another 2 dollars to the upside, but, sooner or later, this gap will get filled, in my opinion.
All of those levels should be used to initiate longs on their first print. Obviously, you have to have sell stops below the market, preferable simultaneously entered after you get your long filled. Trying to catch a falling knife can be dangerous or very rewarding. Discretion is the better part of valor, so use tight sell stops.
In the metals, we had a new high at 1375 in gold. Does any one actually think we won’t get a 1500 print? Probably right about the time we go to vote in Nov… Imagine the headlines and the talking heads orgasmic reaction to that development. We are only 125 bucks away from that print. We could do that in less than a week of trading.
In the Cash Dow today’s high print at 11,100 just 110 points below the old April 2 year high at 11,210… We should see that by Friday’s close. Sell it the first time we print it… remember, on August 27th, we were down at 9920 and the world was coming to an end according to CNBC… Remember that when they start giggling as we approach new highs….
When we get that print, buy a 10,700 put and a 10,500 put. You read it here first. Or just go short, looking for a pullback to those levels. Futures will get you more money, but the puts are a cheap lottery ticket. Buying the puts defines your risk totally.
That is all. Good Trading. Respect the risk or you’ll have bitter regrets.
