Corn High has Time and Price match with 2008

2008 and 2011 have many technical things in common. 2011 has weather, 2008 didn't. Typically it is hard to imagine two exact bull chart patterns, so let us assume it is for a second.

• One would have to say the market is trapped sideways to lower until 14 weeks over from the high, were the market begins a liquidation phase and sharp decline. This time zone of the week of Sept 16th 2011.
  
• The sharp liquidation would last roughly 9 to 10 weeks, completing a low in the last week of Nov, around Thanksgiving.
  
• The speed of decline would be determined from where the market is relative to the Mid-Sept 14 week zone, if closer to the highs or making highs the speed of the decline would be extremely steep to catch up with the average decline of 2008, as an example.

Now let's assume that 2011 market is going to be different, a bring a few scenarios into discussion.

• If the weather does fire up the corn market and yield losses are greater then expected in the next few weeks, one possibility would to blow-off jab into the Sept 16th 2011 zone. Projections can be made by using the 4x1 measuring speed line: 132+14 (weeks) or 146 x 4 = 584. That would be 584 cents from the low of 290 = 874. Weather spikes are unpredictable and highly charged emotionally, its tough to stop a loaded train on a dime...
  
• One sayings come to mind; "short crops get shorter" and if this the case one might see these future times as buying opportunities, not bloody unwinding events.
  
• The government ceiling event Aug 2nd is a bust and Gov't shuts down, No USDA reports, No Gov't insurance props, and No grain aid is moved, could see a repeat of 2008.

Time will tell. If you have questions and /or interested in some great option hedging opportunities, just give us a call...

Alex Andresen | Owner of Advantage Futures Inc. | 785-825-5102 | alex@cotlive.com | http://www.cotlive.com/Main.htm

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