Issue Date: October 15, 2009
Where Is The Corn Harvest Low?
This week December corn futures have traded 80 cents off their September lows and 60 cents off their October lows. It’s harvest season in the Midwest and producers are expected to reap a record high national average corn yield, resulting in the second largest crop ever. Wait a minute…what ever happened to the idea of selling corn just before harvest and then covering those shorts at profitable levels on the harvest lows? But where are the harvest lows? Is $3.10, the October low which occurred before harvest even started the harvest low?
My one-word answer to the question above is….yes. It’s my opinion the lows for December corn futures are already in place, as represented by the September low. Also, I’m not expecting the October lows to be taken out when harvest eventually gets underway. The low price achieved during harvest will depend upon how high prices go this month. My upside target for December corn in the current move is within the range of $3.90 to $4.05. Because price forecasting and predicting market moves is a very “inexact science,” I’ll start unwinding length on any trade above $3.90 and if prices eventually reach $4.05, I’ll have liquidated all length and also established short hedged and speculative positions.
By Dennis Smith
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Dow 10,000! Yippee! Now what?
There was joy in Mudville and in the halls of JP Morgan Chase as the Dow Jones reached the 10,000 level for the first time in a year. Hope springs eternal in the human breast as it is official that the worst of the recession is over. It has got to be the Fed minutes told us so. Dow 10,000 became like a magnet as traders could see in their sights the 10,000 Dow Promised Land and for a brief shining moment it seemed like all of our economic problems just went away and all was right with the world. This has got to be great news because the first time the Dow went above 10000 they gave away free hats. Anytime there are free hats involved you know it has to be a good thing.
Of course not being a guy that likes to be a downer at a party and it is not because I am bitter because I did not get a free hat. Ok maybe I am a little bitter but the real concern is what next. Now don’t get me wrong I am thrilled at how far the market has come. Dow 10,000 is an achievement that should be celebrated as it shows you how far we have come from the darkest days of the crisis.
By Phil Flynn
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Stock Index Futures - A Multi-Year Bull Market
None of the bearish seasonal indicators are working. For example, the month of September is historically the weakest month of the year for U.S. equity prices and October is usually not much better. Another failed seasonal is the bearish presidential term indictor. The first year of a presidential term is often the weakest for stock index futures, since the “giveaways” in the third and fourth years of a presidential term are “taken back’ in the first year of a new president’s term. That certainly has not been the case in 2009. Since the fundamentals remain bullish, it should be no surprise that the bearish seasonal signals have failed. Seasonal tendencies are not the best indicators of future price movements, except when they are in line with the fundamentals. We are predicting that, as long as the fundamentals remain bullish, all the bullish seasonal indicators will work, while all of the bearish seasonals will fail. There is a bullish seasonal that is coming into play soon. History has shown that November has been the best performing month for the S&P 500, on average, since the early 1950’s. We can expect that this bullish seasonal will work, since it is in keeping with the stronger economic fundamentals.
By Alan Bush
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