Grain prices, just as they did last week, have rebounded modestly following yesterday's limit down move. Corn remains week and has dropped modestly lower this morning, but soybeans (see chart) and wheat have not confirmed a downtrend, and have moved higher instead. Note, however, that in the daily chart for the grains (not shown here), the Klinger Volume indicator is showing a bearish divergence. When this occurs, I will tighten my stops and maintain tighter stops for the next few days until either 1) prices drop through my stop and liquidate my position, or 2) prices rebound solidly higher, suggesting that the bearish divergence wasn't valid. In either case, maintaining a tight stop beneath the recent lows will help me to both protect my profits and leave room to the upside for further price increases. Tuesday, January 13, 2009
Grains Struggle to Build Foundation Following Yesterday's Bloodbath
Grain prices, just as they did last week, have rebounded modestly following yesterday's limit down move. Corn remains week and has dropped modestly lower this morning, but soybeans (see chart) and wheat have not confirmed a downtrend, and have moved higher instead. Note, however, that in the daily chart for the grains (not shown here), the Klinger Volume indicator is showing a bearish divergence. When this occurs, I will tighten my stops and maintain tighter stops for the next few days until either 1) prices drop through my stop and liquidate my position, or 2) prices rebound solidly higher, suggesting that the bearish divergence wasn't valid. In either case, maintaining a tight stop beneath the recent lows will help me to both protect my profits and leave room to the upside for further price increases. 
