I present my long-term analysis of corn.
First I would like to show the fundamental situation.
In a recent agricultural report, we find that the conditions for growing are very good. Increases the yield of corn on a 1 hectare. Also increased forecasts of accumulation assuming the worst scenario growths approx. 0.07% compared to the previous year, and the most optimistic is 3.7%. Also predicts a reduction in closing stocks of corn in the world.
I’m interested in a long term trade and start with a one-month chart.
We can see that until 1996 we had an upward trend. Later, for 10 years the price moving in consolidation chanel. In the middle of 2004 years price beat the upper limits of consolidation and then we had a technical test of the upper limit and dynamic continuation of the trend. Since June 2006 the corn started cheapen, it looked at the new downward trend (we had a lower-hole, lower-peak, lower-hole, lower peak). Then we had a dynamic growth, correction and a new higher peak. Then the price started to fall again but from this perspective you can see that the decline has covered almost the entire range of the previous “big correction”.
On the chart week we have a downward trend from September 2012. On the other hand I want to show you a very interesting situation.
Look at this chart and oscillator. We had a false breakout with divergence. Turquoise rectangle shows the strength of bears in the earlier period. The yellow rectangle shows the willingness to bears of change the balance of power. Orange rectangle shows the bears and the price set new lows and rapidly retreated below the previous minimum. After the formation the price of $ 304 (for 22 months and 3 weeks) reached a level of $ 797 per 100 bushels!
An identical situation we have here. This time the price from $ 570 for 100 bushels reached a level of $ 837 in just 3 months (In this situation, you could catch almost all the move, please see the chart below).
Look at the chart in a small net and you could seen another identical situation. The difference was that the signal was on the short position. Price within 26 months dropped from $ 837 to levels of present day ($ 363/100 bushels). Please see what we have a situation in the chart below.
Another identical patern. Is he right this time? No one knows..
I present you my analysis, I’m not trying to predict the hole. I’m not write about that the price does not reach the lower level of the current. I present only my opinion and patern which I use. Of course it is not reliable, reliable patern does not exist 😉
I invote you to read my previous article about my trade (link)
I wish you a profitable position.
