March Corn Futures
Taking a look at the structural nature of March Corn’s recent yet modest advance from 446 it appears to me that this is the first hint in a while that this time may be a bit different. The theory of Elliott Wave contends that trends begin and end in 5 wave. With this in mind one could make the argument that this subset move is in the process of displaying such qualities. In my opinion one need’s always respect the dominant trend and there is seldom any glory in attempting to pick a move’s terminating point. In this instance more evidence is required. As of today’s closing price of 351.25 we have approached the first level of contention slightly overhead at +/-352.50. Any pullback from here that may unfold would have to hold off from violating the inner 348.75 high. Another point must be made is the appearance of momentum diverge evident in multiple time-frame price charts. Prior to all this a colleague and myself spent a considerable amount of time analyzing longer term volatility charts. Employing cycle studies going back nearly eight years the timing for a change of landscape points to the first quarter of the 2018. The nature of implied volatility in the agricultural markets differ than that of the equities. Most of the trading and investing crowd are familiar with the VIX index. This product in most instances will tend to increase during periods of measurable selling pressure. Inversely in the agriculture markets this phenomenon develops during price advances. In six of the seven previous rises in volatility there is a 8o to 100 cent increase in the underlying. In not any means am I suggesting jumping into the deep end rather it is my opinion that opportunities will present themselves in the near future to take advantage of our observation. Please fell free to contact me at Walsh Trading to discuss suggested options strategies to capitalize on this development.