This week feels very much like it should be a reality TV show combined with a news show – a variation perhaps on That Was The Week That Was. The end of the week saw the dollar rise and everything else fall. Gold was down, silver, copper, crude, grains, meats, O.J., cocoa, cotton and coffee were all down along with the stock market and the bond market. The stated reasons are "concern" over European debt issues (Ireland) along with China’s notion that it may want to raise its interest rates. I don’t like to see everything move in the same direction – it takes only a few days of such action to really upset the world’s financial apple cart, which is always worse for those of us who aren’t gazillion-aires than for the very few who are.
One of the inevitabilities of CoT analysis in sudden shift situations is that it lags. Price-action analysis is more timely. As you have noticed, I use both.
Oats: not much happened on the CoT numbers, but those were reported on Friday for through the previous Tuesday and all the action was on this Friday. The bearish price action began on Tuesday and culminated with Friday’s across the board drop – that is, culminated for this week. Had this been a "Friday Only" drop, I’d be skittish about shifting from neutral to bearish. I am, however, now expect the price of Oats to drop at least as far as $3.10.
Corn: a lot like oats in every respect. I expect the drop will carry at least as far as 480.
Wheat: in the shorter term, I expect 640 or lower; in the longer term I expect we will see prices down around 525. It will be a very big surprise to me to see prices under $4 in 2011. Very big.
Beans: here I am shifting from bullish to neutral. It certainly seems like beans "oughta" go down, it is that time of year; and it seems like corn, wheat and oat prices "oughta" pull the price of beans down. However, the price action on the bean chart isn’t bearish; at worst, it is neutral. In a different environment, I’d think it to be a correction before more upward action. That could change quickly. When things change, so will my opinion. For now, neutral will have to do.
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