Sunday, April 25, 2021

#Corn Review $CORN #ZC_F

Corn Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Corn's overall trend, revealed by trends of price, leverage, and time, are defined and discussed in The Matrix for subscribers.

Subscriber Comments

The following discussion is not meant as criticism of any observation but rather an extension of the comment that "this type of move is unsustainable."

Sustainability is a function of cycle extension. Specifically, we're asking if the 16 day and 15% rally since its inception is excessive.

The 15% rally produces a daily BuS = 2.3, so P(x < Z) = 0.98928. In other words, 98.9% of all the previous up impulses have been below 15%. With that said, the previous daily up impulse, the one before the last reset, recorded a BuS = 4.5. It did this with a 24% rally; this was the largest rally in 5+ years.

Corn is an extremely volatile commodity. Numerous daily impulses above 20% were recorded in the 70's and 80's. The largest rally at 69% was recorded in 1988. Bottom line, 15% is not something to chase, but the assumption that 15% represents a firm upside limit is not correct. History has recorded numerous daily up impulse above 15% since 1959; this is why BuS = 2.3 and not 5.0+.

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