On January 7th I advised traders on the following “Today I would advise traders to watch for another breakout” “I believe short term aggressive levels are $6.11 ¾ on the upside and $5.89 ¾ on the downside and the medium term breakout levels are $6.18 ½ upside and $5.83 ½ on the downside.” Let’s take a look at what has happened since last Friday (see both charts below). As you can see the medium-term downside breakout level held at $5.83 ½ with lows coming in at $5.85 ¼ before seeing moves this week to a high of $6.17 ¼ which was reached today after seeing a small inside day yesterday. With the break higher today the market has triggered a short-term buy (for aggressive traders) in my playbook. As I said last week, I still remain bullish and traders should watch the medium term breakout levels for market direction.
The “big picture” numbers remain the same and probably will for some time. I firmly believe a break below $4.96 could give the bears control of the market and a break above $6.39 ½ on the upside may have enough bulls behind it to propel corn to all-time highs. There are several minor areas of support and resistance inside this range that can help with short-term market direction if violated. Call me directly at 1-800-367-7290 for more in-depth discussion on these numbers and to discuss trading strategies specific to your situation.
I would suggest using an option strategy to manage your futures position risk or an outright option strategy. Implied option volatility has come down quite a bit from its most recent highs mainly due to the consolidation and tighter trading ranges. I have 25-years of grain market experience, feel free to call or email with any questions you may have. Be sure to check out my archived weekly grain market insight articles posted on our website.
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