July Corn Possibly About To Pop

July Corn Daily

July Wheat Daily

Today, 5/12/2022 at 12:00 pm ET, several grain related reports were released by the USDA. Wheat rocketed up, and this is the grain I wanted to buy, but the risk is too high for a pullback to the support level it broke through. So, I may get some wheat if it pulls back then bounces back up.

The corn market had a much more subdued reaction, yet still bullish. You can see yesterday and the day before formed a Doji Gap Up candlestick pattern, after bouncing off the 38.2% Fibonacci retracement level.You can also see Stochastics were oversold at the swing bottom. Finally, we closed over the 8ema and every other MA on my chart, on high volume.

I don't go out of my way to follow fundamentals, but the price of everything is going up in our high inflationary environment, which especially includes food and energy. Corn is used for both. This is generally bullish for corn. Then you have decreased grain exports from major supplier countries and bottlenecks in the supply chain. Also bullish for corn.

Also, the US Dollar has been screaming higher due to a flight to safety to the USD. A strong dollar should diminish prices, but corn rose today as the dollar ETF UUP made a new 2 year high.

So, based on all this bullishness, very near the market close at 14:20 ET, we bought a YC July futures contract for 794 1/2. I managed to get a Tweet out at 14:14 ET. Set a Stop at 768, just below the recent swing low, and a Target at 860, shading the 127.2% Fibonacci extension of 860.382 by just a little. We're using the YC mini-contract ($10/pt) rather than the full sized contract ($50/pt) to contain risk.

Summary:

Entry 794 1/2

Stop 768

Target 860

Risk 794 1/2 - 768 = 26 1/2 points

Reward 860 - 794 1/2 = 65 1/2 points

R:R = 65.5/26.5 = 2.5:1 which is great.

June AUD/USD Russian Doll Gartley Patterns

This is going to be a crazy trade. I was setting up the Gartley pattern on the AUD/USD 60 minute chart above and when I was finished, I noticed there's another smaller Gartley pattern inside the first.

The bigger Gartley, let's call it the 1 hour (1h) Gartley, is still establishing its C point. I was going to wait for the D point before entering a trade. But the smaller Gartley, let's call it the 15 minute (15m) Gartley, is establishing its D point. 

The 1h Gartley has white comments and green Fibonacci's. The 15m Gartley has yellow comments and yellow Fibonacci's.

So, we can enter the 15m Gartley, but instead of using the usual .618AD Target, we can go for a bigger Target of the 1h Gartley D point. However, I want to be conservative and trade each pattern separately.

I got 2 AUD June futures using mini-contracts because the risk is 85 pips. If I used 2 full contracts I'd be risking $1,700.

I bought the 2 futures at .7372. The Stop for both is just over the X,A point at .7457. The first Target is the .618AD of the 15m Gartley. Using the current D value of .73775, the Target is:

.73775-.618(.73775-.72555)=0.7302104

The second Target is the 78.6% Fibonacci of the 1h Gartley XA leg, which is .71797. Also, using the current C point, the calculated D point is:

.73775-(.7455-.72555)=.7178, which is amazingly close to the .71797 Fib.

We'll shade the second Target a bit because on the way there, we'll encounter the .7200 level, which is a round number. You might point out we'll also be encountering the .7300 level, but that's nowhere close to the Target. Also, there is some possible support from a gap down and swing low from late February. This adds to desire to shade the second Target up to the .7200 level.

Now, here's more craziness. There's a speaking engagement in Australia by RBA Govenor Lowe at 17:15 ET, while the FX market is closed between 17:00 - 18:00. So, come 18:00 this evening, we may get a gap open but there's no telling in which direction. I could have waited until after 18:00 to enter, but I decided I can handle the risk.

Bottom Line:

Trade 1

Enter: .7372

Stop: .7457

Target: .7304

Risk: .7372 -. 7457 = -85 pips.

Reward: .7372 - .7304 = 68 pips.

R:R : 68/85 = 1:0.8 This looks bad but remember the Gartley pattern has a 75% Win Rate, which means you could have a R:R of 1:0.3 and still break even. Plus we have the 1h Gartley that may pull down price further than usual.

Trade 2

Enter: .7372

Stop: .7457

Target: .7201

Risk: .7372 - .7304 = 68 pips.

Reward: .7372 - .7201 = 171 pips.

R:R = 171/68 = 1:2.5 which is great.

Warren Buffet endorses my concerns for the US Dollar (and what I've done about it)

 https://www.zerohedge.com/markets/did-buffett-just-bet-against-us-berkshire-buys-barrick-gold-dumps-goldman

This is an article on ZeroHedge about Warren Buffet doing an about face on Gold in the 2nd quarter this year 2020 and he took a significant position in Barrick Gold. This supports the idea of allocating some funds in your portfolio for a hedge against the eroding purchasing power of the US Dollar, and many other fiat currencies around the world.

See

https://jmstweets.blogspot.com/2020/07/youre-losing-value-even-if-your.html

https://jmstweets.blogspot.com/2020/06/dead-man-walking.html

https://jmstweets.blogspot.com/2020/04/usd-is-doomed-to-devaluation_11.html

https://jmstweets.blogspot.com/2020/03/why-printing-money-adds-lubrication-to.html

I can't say what's best for others but what I'm doing for myself is including an allocation of 10-15% of my portfolio for GLD, GDX, and SLV. I may buy some physical gold and/or silver in the near future as well. 

GLD is an ETF to mirror the market price of gold.

GDX is an ETF of the major gold miner companies.

SLV is an ETF to mirror the market price of silver.

ETF is an Exchange Traded Fund. Like a mutual fund but you can trade it like a stock.

I've been in GLD for 7 years and when the Federal Reserve announced earlier this year it will add $Trillions to its balance sheet and whatever else it takes to fight the economic effects of COVID-19 I added shares of GDX, SLV, and UUP Puts.

I also have a very small amount in UUP (Invesco DB US Dollar Index Bullish Fund) Put Options. UUP is an ETF meant to mirror the price action of the US Dollar. Put Options are a bet that UUP will go down over time.

Again, this is not necessarily a good idea in your particular situation, but it seems like a good idea as a hedge against all the forces driving down the value of the US Dollar. You don't have to just endure what's coming and hope things will return to normal. You can take a hedge if you have some funds you don't need for spending for a while.