THINGS YOU NEED TO KNOW ABOUT CORN AND GOLD
Corn: If you read Trends and Reversals emailed over the weekend you know that December Corn confirmed a bearish reversal. You should also know that it will need a close at or above $4.81 ½ tomorrow (8/9/2019) in order to return to a bullish trend. So what do we know? Rarely do I co-mingle the fundamental with our model analysis but one cannot be blind to the importance of the USDA report due out Monday. I think we can all agree that December Corn will not close at or above $4.81 ½ tomorrow. I think we can also agree that the report on Monday could impact the following week(s). Looking ahead there is good news and bad news. The bad news is if December Corn rallies and closes at or above $4.46 ½ tomorrow then the good news is the trend turning value for Friday (8/17/2019) drops to $4.33 ½. If all that fails to reverse the trend to bullish the critical price for Friday (8/24/2019) becomes at least $4.63 ½ if not higher. We know that as of last Friday the negative indicator was approaching the second standard deviation above the 206 week average, while the positive indicator was within the first standard deviation but below the 206 day average. This tells us that USDA report or no USDA report December Corn was getting close (not there yet) to being overstretched to the downside. December Corn closed last Friday at $4.09 ½ and is presently trading at $4.16 ¾. If Corn closes higher for the week it will ease the overstretched tension setting up the trade for Monday after the report. What to do? Other than far out wish orders on either side of the market I am standing aside until after the report. If you are interested in wish early indications for wish orders (check back with us before the report) buy December Corn $3.85-$3.75, or sell at $4.54-$4.35. For wish orders for soybeans and/or wheat give us a call 1-877-304-1369.
Gold: If you read Trends and Reversals emailed over the weekend you know that December Gold is in an uptrend. You should also know that it will need a close at or below $1322.60 tomorrow (8/9/2019) in order to reverse the trend to bearish. So what do we know? We know that earlier in the week Gold had become overstretched to the upside almost entering negative equivalency but then backed off on the break today (presently December Gold is trading at $1506.60 down $13.30). As of last Friday the positive indicator was above the 2nd standard deviation and below the third, while the negative indicator was within the first standard deviation and above the 206 week average. This is typical of a commodity getting close to negative equivalency. What to do? While there are NO sure things in commodity trading I like recommending counter trend trades for the overstretched commodities. Consequently I am reluctant to suggest buying Gold at this level but would rather wait for confirmation that December Gold has entered negative equivalency and counter trend sell. Look for future reports where this will be discussed.
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