Corn Outlook
Longer term wave structure lays out a reasonable scenario to follow. All directional analysis designed to develop a strategy are intended to define risk and maximize profits to achieve a favorable rate on investment (risk vs reward). No recommendations are made without these criteria. As it appears now studies suggest we could be entering another leg lower. A potential b wave triangle has developed. This pattern exists within a larger ending diagonal in the dominant time frames. Should this play out accordingly there would be an opportunity for one to capitalize on such an event. This scenario sets up as a potential 350% return on investment. Employing the use of options allows this investment strategy to have a limited and definable risk. In regards to the structural assessment, the confluence of measureable projections would indicate a decline in prices that project to 320.0-300.0 in the July contract. This setup triggers with a violation of 364.2. The purchase of the September 360.0-320.0 put spread priced at roughly $400.00 per contract would then have the profit potential of about $1600.00. There for an initial investment of $20,000 would yield $70,000.
Looking down the road, an even greater opportunity could set up. Keeping in step with the existing wave structure, a sizeable advance off the 300.0 level would be reasonable. Projections target 500.0. This is all contingent on the market completing the terminal wave of the decline. Generally speaking, the ensuing recovery is quick in nature. A suggested strategy would be the purchase of the 380.0-4.80 call spread in the March of 2018 contract. Future price studies approximate the initial investment cost to be roughly $650 per contract with the profit potential of max profit potential of $5000.00 per contract. This yields 770% return on investment. Therefore an investment of $20,000 would return $150,000.
This entire analysis is all subject to the contracts conforming to the currently perceived structural analysis. This would require a hold below the recent high of 377.4 and the violation of the previous level 362.4. Strategies developed employing the wave principle indicates situations where price violations point to a different picture and outlooks need to be reassessed. The market is a puzzle with many moving parts. Structures evolve and errored with the movement of price and time. However, staying in step with these developments allows investors to gain insights in to possible high reward low risk opportunities. Patience and discipline are ones allies.
