Corn and wheat continue in a downtrend, with favorable weather dominating the news cycles. Even soybean prices are showing some softness. It seems odd that we hear nothing in the news media about this.
Look how far the price of corn has fallen (below) over the past 2-3 weeks. This chart is a very good example of the "Australia" pattern from Philippe Cahen's book. (I have no idea why he chose that name, since he doesn't explain it in his book, and it certainly isn't obvious from looking at it.) The Australia pattern involves a reversal. Apparently, it involves a transition from a volatile trend in one direction, to a volatile trend in the opposite direction, but without the intervening period of low volatility in between. One could certainly make the case in this example that there was a period of minimal volatility in between, but since prices reached a new high and then immediately reversed to the downside, the typical flat Bollinger Bands never occurred in this example. Hence, the Australia pattern.
Note, however, that corn is very close to reaching the price support level where it consolidated previously at just above the $6.00/bushel level. Corn has declined about 25% from its recent highs, yet this decline has hardly made the newspapers, much less garnered any headlines. Have "speculators" been given the credit for this decline? No. The news media and Congress are too busy painting them as villains!
Look how far the price of corn has fallen (below) over the past 2-3 weeks. This chart is a very good example of the "Australia" pattern from Philippe Cahen's book. (I have no idea why he chose that name, since he doesn't explain it in his book, and it certainly isn't obvious from looking at it.) The Australia pattern involves a reversal. Apparently, it involves a transition from a volatile trend in one direction, to a volatile trend in the opposite direction, but without the intervening period of low volatility in between. One could certainly make the case in this example that there was a period of minimal volatility in between, but since prices reached a new high and then immediately reversed to the downside, the typical flat Bollinger Bands never occurred in this example. Hence, the Australia pattern.
Note, however, that corn is very close to reaching the price support level where it consolidated previously at just above the $6.00/bushel level. Corn has declined about 25% from its recent highs, yet this decline has hardly made the newspapers, much less garnered any headlines. Have "speculators" been given the credit for this decline? No. The news media and Congress are too busy painting them as villains!Wheat (below), while also in a downtrend, appears to be firming up for a bottom. This is to be expected, since the price of wheat declined 45% from its highs during the Spring, and had only risen somewhat more modestly, compared with the other grains, since the first of June.
