Markets as I see them – February 8, 2011

Howdy again, seems like some things take forever to play out.  The DOW is up over 12,000(actually 12,200) and crude is slowly inching downward, after a run up to $92.00 currently at $87.50/barrel.  Corn and Beans are both still heading higher, after filling gaps they left from the drop in September-October of 2008.  The first of these gaps was 11.80-11.92 in soybeans and 5.20-5.45 in Dec corn.

 

SOYBEANS:   Currently looking for a push into the $15.00 range. I see no gaps left unfilled from the June 2008 peak down to the December 2008 bottom.  The break-away gap at 11.50 in October 2010 can be used as a measuring gap targeting $15.00.  The area between the last two closes in this area (14.90 & 15.20) should catch the top of this current rally. The Chinese buying has been high and continual.  Weather around the globe has been less than ideal, but South American bean harvests look huge. I see this market sliding lower especially during peak harvest of South American beans - soon. 

 

CORN:  Ok now looking for a nearby top in the $6.90 – 7.15 area(March contract) and an excellent shot at filling the Dec 2011 weekly chart gap at $6.05-6.18 soon as we are above $6.00 Dec 2011 contract) now.  There is a possibility of topping in the $6.25 – 6.35 area as retracement percentages and last closes in this area match up.  I would be a seller of any unpriced 2010 and 2011 crops in this area NOW.  I believe a return back under 3.25 is very possible if world crops turn better or the world economy tanks in 2011-2012.  There may be some upward movement during an acreage battle later this spring but I believe it will be at a somewhat lower level than the tops mentioned above.  There is an outside chance of another wave higher but if the dollar strengthens(this is happening now) and more world unrest unfolds I believe fund money will leave this market taking the long profits.

 

Crude Oil:  Crude has fallen from the $92.80 area to around $87.00 and should be headed lower into the summer($60-70.00 area) and then collapsing below $40 into 2012.   

 

DOW:  The current upside correction push should end very soon(under 12,600) leading into another downward thrust into the 8,000 area.  Still looking for a deeper drop by 2012, especially if you believe we are in a Grand Super Cycle degree wave down.

 

Still looking for overall weak markets (Grains, DOW, Crude in fact all commodities and stocks) from 2012 – 2016 if Global Deflation continues.  We have had very minor setbacks during this recent run up of commodities and especially stocks.  The Elliott wave count still forecasts a deeper drop in the coming months.  Along the way there will certainly be some up moves but the overall sentiment should be downward.

 

I hope we don’t see that bad of an outcome but with all of the easing of financial restrictions during the Bush administration – restrictions put into place during the 1930’s- along with the easy credit, money expanding philosophy pushed by the big banks, we can only head to a lower reality.  If we could face it sooner than later we might still have a chance to soften the blow- its just not looking good now since the government is pushing more money into the economy and the banking industry is receiving ever larger profits and handing out outrageous bonuses.  All the while we are still seeing record bank closures by the Feds –14 banks so far in 2011(its only early February) compared to a total of 157 bank failures in 2010.

 

 

Gerry

 

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**Disclaimer:  The content on these pages are the opinions of Gerald Slezak and are not intended to be a recommendation to buy or sell commodities or stocks in real life or on the CBOT, CME, KCBOT, DOW, S&P etc.  Any correlation between the predictions and/or recommendations and actual market moves is purely coincidental and are not guaranteed to happen more than any other advisory service.  Some or all of the information and recommendations may have been gathered through real life situations, here-say, SWAG computations, and Bohemian legends.  Please use common sense in all farm marketing transactions.  We make no guarantee of content and will not be held responsible if you make money or loose money of your own free will.