As can be seen in the Monthly and Weekly Wheat charts below, Hard Red Spring Wheat has hit a multiyear low. We are going to wait and see if this current #1 point of a 1-2-3 bottom formation shapes up (with the formation of a #2 point) or if wheat is headed even lower. There is huge upside potential since the 50% retracement level in the Weekly Wheat Chart is at 849. Even on the Daily Wheat Chart, the 50% retracement (from its current low) is 721.25 which gives us plenty of upside potential on this long trade in wheat.
As you can see from on the charts below, Corn (CBOT) has made a multiyear low and is forming a 1-2-3 bottom formation, with a #1 point at 418.5 and a #2 point at 439.0 (the chart below is incorrectly labeled 436.75 for the #2 point – oops) with a possible #3 point at 430.25 on 12/6.
If the price of Corn on this March 2014 chart goes above the #2 point formed on 12/5, we will go long corn as it breaks above 439, with a target of the 50% retracement level at 468 based on the last high of 517.50 on 8/26/13 per the Daily Corn chart below.
Of course, the Corn market has the potential to retrace all the way to 564 based on the move from the high shown on the Weekly Corn chart of 717.50 during the week of 7/12/13. So there is huge upside potential with this trade.
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