Amazing that it’s been a YEAR exactly since we took a look at the agriculture sector. The post below was from 06/26/2014. Based on the price action of DBA the past couple days and the action of the beans, wheat and corn believe it’s time to give DBA a shot. Would stop out w/ a close below 21.50.
Happy hunting … man this took a long time to set up.
CLIFF NOTES: Corn and Wheat have hit their targets. Would still see risk below the .841 retrace on Wheat but believe these patterns are complete. Need to wait a little while longer on Soybeans …
the commodity markets are ROCKING AND ROLLING w/ regards to Corn, Soybeans and Wheat ….
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.
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.
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.