DBA – be patient

the commodity markets are ROCKING AND ROLLING w/ regards to Corn, Soybeans and Wheat ….

MI-CD833_CMDGRA_G_20140707180313

so, I don’t know ANYTHING about the inner workings of the grain market but I do know MEASURED MOVES and look at some of the beauties on Corn, Wheat, Soybeans. If we look a the “money manager” bets in the middle of the chart above it appears that NO ONE is bearish?  Also, is the bushels projection that great?  anyway, w/ extreme bearishness and this quote:

“There’s just no real stress, hot [weather] coming along, so we’re going to blast prices down,” said Jack Scoville,

Vice president at brokerage Price Futures Group in Chicago. “Most areas are in really good shape.”

sure looks like a BUY opportunity.  But, let’s don’t get cray cray here … we have a target area of support but look at what happened the last time we had a measured move like this … the darn thing bounced around for 3 months.  so, let’s let the market prove to us if this is support.  then, just wait for that magical weekly or daily pullback (it WILL happen) and then pounce. Folks, this could take months for the correct entry …we’ll revisit these in a couple weeks.

CORN continuous contract MONTHLY

CORN continuous contract MONTHLY

WHEAT continuous contract MONTHLY

WHEAT continuous contract MONTHLY

SOYBEAN continuous contract MONTHLY

SOYBEAN continuous contract MONTHLY

DBA

DBA

 

here is a quick look at the relative strength ratio between DBA/SPY.  obviously, quite the thumping here BUT if you look you can see 5 waves down. if we break the swing low (sure looks like it’s going to happen) then we’ll go to that lower target I believe.

DBA/ SPY relative strength ratio

DBA/ SPY relative strength ratio

 

so, why is this important …? well, let’s take the CORN ETF and overlay it on the ratio.  As you can see … when this ratio bounces so does corn (make sense) so we will look for some rotation into the agriculture market if/when the equities lose there luster.

Main20140712100725

2 Comments on “DBA – be patient

  1. Bart, there are 3 classifications of traders the CFTC reports. Money managers aka large specs are 1/3+ the other large classification is Commercial and will offset the positions of money managers. WSJ is correc, but not addressing the entire picture, a common occurrence when financial press addresses the Futures markets.

    Great stuff as always.

    • Dude – great to hear from you and thanks for the clarification. As a CTA aware of the three classifications but just used this one because it was easy. How are you man?

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