Elliott wave analysis saw corn’s biggest moves coming
April 1, 2010

By Nico Isaac

You could be to technical analysis what tweens are to texting, and it wouldn’t make a lick of difference: You still wouldn’t necessarily be trading at your fullest potential. The reason being: Without Elliott wave in your technical analysis toolbox, it’s like looking at the world of opportunity through a narrow keyhole and ultimately missing the big picture.

The Wave Principle can help you unlock that door. Teaching you how to do it is the goal of the latest free educational report from our Club EWI resource center, titled "How the Wave Principle Can Improve Your Trading." In this six-page article, our editorial staff reveals these (and many more) ways in which the wave model makes up for the ways ordinary technical methods fall short:

• Technical studies can get you on board a trend, but the Wave Principe can say specifically at which point that trend has failed — namely, when prices violate critical support or resistance levels in your price charts.
• Technical studies can identify the direction of a trend, but the Wave Principle can determine how high prices will rally or how low they will fall.
• Technical studies can recognize the strength of a trend, but the Wave Principle can discern the maturity of one; when it’s time to take profits or raise protective stops.
• Technical studies can recognize the strength of a trend, but the Wave Principle can discern the maturity of one; when it’s time to take profits or raise protective stops.

Now for the fun part: Putting the Wave Principle to use in the real-time action of a well known market. For this, we turn to EWI’s chief commodity analyst and long-time Futures Junctures Service editor Jeffrey Kennedy. (Note: Futures Junctures Service is a two-part package that includes Daily Futures Junctures and its long-term sister publication Monthly Futures Junctures.)

Over the last year, Jeffrey’s timely navigation of the Corn market showcases the ability of Wave analysis to identify high-probability trade set-ups. To illustrate, we’ll start with this price chart of corn since March 2009 (courtesy of ino.com) — punctuated with brief excerpts from Jeffrey’s Monthly Futures Junctures.

Below are the expanded versions of Jeffrey’s analysis:

June 2009 Monthly Futures Junctures:

"The Party’s Over In Grains: The corrective advance in corn that began in December 2008 is complete at 450 (basis July). This means that the stage is set for renewed selling that should push corn prices to below the 2008 low of 325 1/4. Moreover, considering the manner and extent of the decline since the early June top, wave patterns argue strongly that this is an intermediate tradable top."

September 2009 Monthly Futures Junctures: Presented an updated chart that showed prices set to embark on a powerful uptrend above $4 and wrote: "After a Rally, More Decline."

January 2010 Monthly Futures Junctures: Price chart showed wave c of a zigzag coming to an end and wrote: Wave c = .618 times wave a + wave a at $4.26.

When applied skillfully, no method gets you into a trend earlier and out of a failed move faster than the Wave Principle. Read the entire free 6-page report "How the Wave Principle Can Improve Your Trading" today.

Here’s what you’ll learn:

• How the Wave Principle provides you with price targets
• How it gives you specific "points of ruin": At what point does a trade fail?
• What specific trading opportunities the Wave Principle offers you
• How to use the Wave Principle to set protective stops
• Keep reading this free lesson now.

Nico Isaac writes for Elliott Wave International, a market forecasting and technical analysis firm.

By Millie Munshi

photo
credit: Gord McKenna

July 24 (Bloomberg) — Prices for commodities including oil and copper may rally another 12 percent this year, based on a technical analysis of moving averages by Logic Advisors.

The Reuters/Jefferies CRB Index of 19 raw materials climbed above its 50-day moving average today, a “bullish” signal for prices, said William O’Neill, a Logic Advisors partner in Upper Saddle River, New Jersey. As the index moves higher than the 50- day average, that momentum will attract more investors to commodities, helping to spur further price gains, he said.

The CRB Index has jumped 26 percent from this year’s low on Feb. 24, as indications emerged that the worst of the global recession has passed and China’s demand for raw materials rose. Oil has surged 51 percent this year, and copper is up 79 percent.

“Commodities are in a bullish mode,” O’Neill said. “We’re seeing more money flow into commodities, particularly industrial commodities, and we’re seeing the gradual erosion of the dollar. These will continue to be driving forces for these prices, along with the evidence that the global economy is bottoming. We’ll see commodities rally 10 to 12 percent by year- end.”

Earlier this year, the CRB pushed past the 50-day moving average on March 17 and rose 6 percent by March 23 before retracing the gain. The index jumped over the 50-day average again on March 31 and surged 21 percent by June 11.

The CRB Index rose 1.8 percent today, the biggest gain in six weeks, to 251.27 in New York. The gauge’s 50-day moving average stood at 248.50.

To contact the reporters on this story: Millie Munshi in New York at mmunshi@bloomberg.net;

Here is a list of some W.D. Gann books at Amazon.com. The list is a computer search so notice that not everybody named W.D. Gann is a trader.

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Follow crude, forex and optionable stocks in the free tradingsystems section of this website.

Lower looks more likely than not after a consolidation period. It would take a strong rally to change this outlook.

A reversal bar on a matured, new swing high is almost always a tradeable opportunity. Follow the link to see our reversal bar tutorial.

The chart is from our Trading System page. The charts are usually updated daily before the market open. The trading system is a take off of Bill William’s Chaos Trading system.

Wall Street stocks were set for a muted start on Friday, with oil producers expected to remain under pressure as crude traded below $55.50 a barrel and investors waited for monthly U.S. jobs data.