Bottom in Corn?

December 4, 2017 10:00AM CST

In 27-Nov's Technical Blog we identified 22-Nov's 3.58 high as our new short-term risk parameter the market needed to sustain losses below to maintain a more immediate bearish count. After severely testing 16-Nov's 3.49 low, Fri and overnight's recovery above 3.58 identifies that 3.49-area as one of developing importance and potentially the END of a major 5-wave Elliott sequence down from 11-Jul's 4.26 high. In this regard 3.49 is considered our new short-term risk parameter from which non-bearish decisions like short-covers and cautious bullish punts can be objectively based and managed.
Corn_Mar18_60min_Chart
Corn_Mar18_Daily_Chart
Readers of our blog that we've been of the opinion for many quarters now that this market has been in a major BASE/REVERSAL PROCESS sine Oct'14'sd 3.18 low. We've identified the lower-quarter of the 3-YEAR range between 3.15 and 4.54 as a key base/reversal component along with historically bearish sentiment levels.

Now far be it from us to conclude a major base/reversal count following proof of only smaller-degree strength above a level like 3.58. Indeed, commensurately larger-degree strength above 25-Oct's 3.69 larger-degree corrective high remains required to confirm the end of a 5-wave Elliott sequence down from 11-Jul's 4.26 high. But given the:

• textbook appearance of this sequence labeled in the daily log chart above
• the prospect for a "double-bottom" reversal in the hourly chart top
• historically bearish sentiment levels clear in the weekly log active-continuation chart below
• a CONFIRMED BULLISH DIVERGENCE IN WEEKLY momentum on the weekly active-continuation chart below and
• the market's continued rejection of the lower-quarter of the 3-year range

We do not believe it is too early to move to a new cautious bullish policy. If such a policy is wrong from current 3.60-area prices, the risk is 11-cents. If it is right, the market's upside potential is indeterminable and potentially extensive (i.e. to at least the upper-quarter of the 3-year range in the months and quarters ahead.
Corn_Weekly_Chart
Corn_Monthly_Chart
Finally, we would remind traders of the past few years' virtually identical price action to the major base/reversal process from Dec'08's 3.05 low that led ultimately to Jun/Jul 2010's major rally. Also, the Fibonacci fact that the secular bear trend from Jun'12's 8.49 all-time high to Aug'16's 3.15 low is identical in length (i.e. 1.000 progression) to BOTH previous bear markets from 1996 to 2000 and 2008 - 2009. Against this long-term backdrop of technical facts traders are urged not to discount the prospect for considerable gains following admittedly short-term strength the past couple days.

These issues considered and while further proof of strength above at least 3.7o remains required to reinforce a major base/reversal count, traders are advised to move to a new cautious bullish policy and exposure from 3.60 OB with a failure below 3.49 required to negate this call. We believe the market's upside potential to be indeterminable and potentially extensive in the months and quarters ahead.

Corn_Quarterly_Chart

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