Can anyone say “volatility”?? Just yesterday CH broke from a new 2-1/2 year high at 666 1/4. The low was 7.27 1/2. 7.30 was a 50% RT of the 7 week, 71 cent up move.
Apparently, that was enough to get buyers back in to the market.
More importantly, the Rumor Mill was out again that China was buying US corn. When that rumor came out, CH was at 6.32 we settled the day at 6.54 1/2.
What is most impressive is that Corn did this on its own. The dollar was up, crude oil was down 2 bucks, gold was down 20 bucks…. Corn should have been on its heels all day.
This type of market action is suggesting that there is an underlying strength in this market which will send us substantially higher over the next two months.
I continue to want to buy dips. I have been preaching that for a while. Its fun to pick tops, because the pay off is so quick and there is nothing like being short in a market that’s selling off. I’d say its one of the best emotional feelings out there. That’s why so many professionals like to sell. The pay off, when you are correct is quick and usually substantial.
It takes much more emotional control to maintain a long position as the market creeps higher. Even more discipline to maintain that long bias in the face of frightening corrections.
Like Sherlock Holmes said to his side kick, Dr. Watson. The Game’s Afoot… What is the mystery providing this type of support in corn? We may well find out in the next 24 hours.
The action we’ve seen in the past 24 hours of trading is a perfect illustration of why we use stops to manage profitable positions. It takes the emotion out of pulling the trigger on the exit.
That’s all I have to say about that.
CER
