I for one will be glad to see this month end. Today’s large move down in CORN seemed to put a punctuation mark on my performance this month. However I think today’s move was the flush out need for this to have an upward move over the next couple of weeks. It’s possible that it’s forming a head/shoulder top and we’re going to build the right shoulder but that is only one possibility and it’s not written in stone. We could just as easily power upwards to new highs but I’ll be taking some of my position off the table near $46 and letting the rest ride. If we go back to $50 I’ll probably exit the whole trade.

Judging by the BB Width we’re at extremes and we’re over 20% off the highs. A corrective move is likely. The BB Width is a relative tool that tells us where we are in relation to the bollinger bands and we’re clearly at extremes.

Related Posts:

Weekly Charts Suggest More Selling

Looking At Various Commodity Charts

Market Astrology : Corn Breakout

12 Responses to “Good Riddance To September”

  1. Lioncub Says:

    I don’t like this type of market either. With exception of this Thursday/Friday, I am expecting to see greener markets in the coming week.

    With Mercury being the king for this lunar month, we can expect these kind of spikes up and downs.

  2. Steve Says:

    I picked up Potash Corp yesterday thinking something similar- the chart is basically a reflection of the performance of CORN and seems to mirror its move. POT’s chart looked like it formed a hammer yesterday and an imperfect inverted hammer today. The move this morning at the bell seemed like a flush…we’ll see going into next week. Red is definitely not my favourite colour.

  3. jeff pierce Says:

    It’s possible POT could bounce back to 52-53 level if the markets stabilize.

  4. abdul Says:

    Market may attempt to close the August gap last year for POT, weekly chart sloping down, don’t forget your stops Steve. If this is what they want, then the whole sector may follow along the movement in sympathy. I am still in cash after my last blunder, still licking the wounds and still going through my trading log all over again and again. Hopefully next time, I’ll be more cautious in money management.

  5. jeff pierce Says:

    That could be priced in.

  6. Kevin Says:

    good riddance to september indeed!

    Interesting data on the often looked at ‘Dr. Copper’. Looking at historical data it should be viewed as more of an indicator of future RISING stock prices than a predictor of upcoming equities bear market. Just an observation. Historical data does not lie.

    http://takingmoneyseriously.blogspot.com/2011/09/dr-copper-needs-license-revoked.html

  7. jeff pierce Says:

    copper chart. – nice looking blog Kevin.

    http://screencast.com/t/dpkSZAwZ

  8. abdul Says:

    Interesting data on copper as an indicator. Thanks. Only this time it was crisis in Europe zone, housing and jobless crisis in U.S and all the sick banks. I am still not convinced that money will flow back to the equities market in the short term. I have been wandering how can U.S create jobs by the millions for it’s people in the next six months ? It’s a problem man.

  9. Kevin Says:

    I agree that there are lots of negative macro data concerns. However it seems everyone is a bear these days – pessimism running rampant. I am seeing some contrary indicators that may temper bearish enthusiasm in my mind- extreme bearish sentiment being a major one, copper in extreme price decline being more positive for future prices is another. And then there is October – normally being viewed as bearish in reality is not so. This in Barron;s today:

    “We’ve seen a lot of bear markets hit bottom and turn in October,” says Jeff Hirsch, editor in chief of Wiley’s Stock Trader’s Almanac, whose latest edition is due out Oct. 11. “We call it a bear killer.” Hirsch notes that 11 postwar bear markets on the Dow Jones Industrial Average have reversed in October. (The Standard & Poor’s 500 and the Nasdaq usually moved in lockstep with the Dow during these periods.)

    Take Stock: Though some have “Octoberphobia,” the month can be a positive turning point for equities. True, some Octobers, like 1929’s and 1987’s, have been extremely cruel. But Hirsch says that, going back to 1950, September has had a greater average loss. In fact, October ends the stretch between what the Stock Trader’s Almanac calls the market’s worst six months (May through October) and its best six months (November through April).

    See if history can serve as guide here.

  10. Steve Says:

    Abdul,

    You may be right but over a longer time frame. Given the recent extreme selling in POT, BB extremes Jeff mentioned (same for POT), and distance from key MAs (10/20/50), I anticipate a small rally first before perhaps further decline to fill the gap at $39. I’m long only to catch a bit of the snapback rebound I think is coming. Like Kevin also suggests, everyone is bearish going into October.

  11. abdul Says:

    One of my mentor closed all his long position on Friday after big losses and glad that September is now over.

Leave a Reply

You must be logged in to post a comment.