From last month’s commentary ‘Finally, after many failed Key Reversals Down on Daily Charts and Bearish Engulfing Patterns on Weekly Charts we finally just over a week ago broke down through and closed consecutively under the recent key 50% Fib at 378 which is now resistance. Next will be the 61.8% Fib of the same move at 356 and then the broken but seemingly still valid 2008-to-date Uptrend (currently 350) but I personally would suggest it may be that if we go that way then we try the 2010 low at 324! ‘. That was the way I suggested last month and that is still the way it seems to be going though it is taking its own sweet time about it!
Initially, following my commentary, Corn did decline but then rallied… only to decline again, each time not allowing two consecutive closes under the 61.8% Fib at 356. The second time it became apparent the market was bracketed by the 356 Fib on the downside and the busted but seemingly still valid Long MA (currently 370).
Three weeks ago on the Weekly Chart we had a Key Reversal Up…but this failed as the Long MA asserted further power and managed also to sterilise the Bullish Engulfing Pattern you can see on the Daily Chart above on the 18th. On the 22nd the market reverted lower with a KR Down and we made the lows for May – based on the old but seemingly still valid 2008 originating broken Uptrend. This is where we are now!
So what next?
It does seem as if the 50% Fib at 367 and the Long MA do have a cap on the market, all but the Long MA are pointing downwards so I will keep the bullet point as it is. The market needs two consecutive closes below the broken Uptrend so it can attempt the next level of support, the possible Lower Channel of the Dec 2014 – Mar 2015 move (currently 341) before THEN trying the 2010 low at 324. I am not sure of the strength of the Lower Channel Line or whether it even exists at this time.
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