The market’s sharp rebound last Tue above our 3.80 short-term risk parameter renders the sell-off attempt from 16-Feb’s 3.87 high a 3-wave affair as labeled in the hourly chart below.  Left unaltered by a relapse below 27-Feb’s 3.67 low, this 3-wave decline is considered another corrective/consolidative structure consistent with our longer-term bullish count recently updated in 24-Feb’s Technical Blog.

The hourly chart below shows the market still stuck within the past month’s 3.87 – 3.67-range where further aimless whipsaw risk should hardly come as a surprise.  But the importance of last Tue’s recovery is that it increases the odds of a resumption of the 6-month uptrend to new highs above 3.87 until negated by a failure below 3.67, our new key risk parameter to a still-advised bullish policy.

Corn May '17 60 Min Chart

Corn May '17 Daily Chart

The daily log chart above shows that the market has yet to provide the evidence necessary to conclude the end of the resumed uptrend from 01-Dec’s 3.49 low.  It is still indeterminable whether this rally is the completing C-Wave to a broader bear market correction or the 3rd-Wave of a major reversal higher.  Fortunately once again, the market has identified an outstanding and objective level at 3.67 from which we can maintain our bias towards the latter bullish count that could accelerate in the weeks ahead and really decide the issue.

Per an alternate bearish count perhaps the Fibonacci fact that 16-Feb’s 3.87 high is the exact 61.8% retrace of 2016’s 4.39 – 3.15 collapse on a weekly log scale active-continuation chart basis below will come into play.  But as always, in the absence of a confirmed bearish divergence in momentum needed to, in fact, break the clear and present uptrend, no merely derived technical level like trend lines, various “bands”, the ever-useless moving averages or even the vaunted Fibonacci relationships we cite often will EVER serve as a reason to buck a trend.

Corn Weekly Chart

We have not visited the quarterly log scale chart (below) for a while, but from this very long-term perspective we maintain that a major base/reversal process has been unfolding since Oct’14’s 3.18 low in a manner similar to that that arguably began with 3Q98’s 1.96 low in this market’s previous major base/reversal episode.  That 1.96 low came TWO YEARS before the Aug’00 END to that secular bear at 1.85.  But even then, the market didn’t exhibit any decent bull run until Apr-Sep 2002, another two years later.

The point here is that secular bear market’s like that from the 1996 high and the recent version from 2012’s 8.49 high can take a commensurately long period of time to base and reverse.  And while constrained within the no-longer-downtrending range like the lateral 4.54-to-3.15-range that has dominated price action for the past 2-1/2-YEARS, aimless whipsaw risk becomes the norm rather than the exception.

These issues considered, forecasting the next 50-cent move, let alone the next dollar move, is a coin flip within the context of the past couple year’s 3.15 – 4.54-range.  For the time being however and as has been the bullish case since introduced in 03Oct16’s Technical Webcast, the trend is up on any practical scale and is expected to continue and perhaps accelerate.  A failure below 3.67 is now required to threaten this call enough to warrant neutralizing a still-advised bullish policy and exposure.

Corn Quarterly Chart


RJO Market Insights

RJO Market Insights specializes in forward-thinking analysis, focused on potential market-moving events and dominant factors driving price discovery. Detailed fundamental and technical coverage across multiple commodity sectors is combined with objectively-constructed trade recommendations to provide an industry-leading product for R.J. O’Brien’s Institutional clients, commercial hedgers, introducing brokers and individual investors free of charge. Content is distributed in both text and audio formats, with specialized service offerings provided by account type.
For more information on RJO Market Insights, contact your broker or RJO representative.