Grains have taken a beating this year, falling significantly throughout the summer months, but have staged a good recovery throughout October. Is this likely to be sustained into November or are these markets running out of gas? We will start by looking at the daily chart for corn. If you are a regular follower of my articles for InterTrader.com you will know I am a big fan of Fibonacci levels. In the chart above you can see that corn has managed to stage a good recovery to the first 23.6% Fibonacci retracement target and resistance at 364/365. Although we managed a little spike above here on 28 October we halted at the 100-day moving average and failed to close above that important Fibonacci resistance. This therefore cannot be counted as a break higher. You can see how there is congestion from late-July lows and much of the price action through August, that coincides with this Fibonacci level, has given that resistance extra weight. As I write we are hovering around the 365 level and you can see that the stochastic oscillator has been sitting in overbought territory for the last…
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October 30, 2014, 8.00pm (London)
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November 4, 2014, 7:00 pm (London)
The problem with the indices right now is that they are over-invested and over-exposed. With ultra-low interest rates comes an ultra-low incentive to put money in the bank. As 1% of the world’s population now owns 50% of the wealth where does all this money go? With indices and top blue-chip companies offering massive dividends and holding huge cash reserves, it’s not hard to see why the wealthy elite would rather put their money in Google than, say, Greek debt. The problem with the old investment model of a ‘balanced portfolio’ is that, without appropriate interest rates, steady bond prices and stability, that traditional model does not work. Ultra-wealthy people are not looking for massive returns; they are rich enough. When we see stock corrections this is not the retail market. This is institutions and large investors taking profit at the top. When large investors sell the moves are huge, over-exaggerated, a ‘flash-style crash’. This is sheer volume, not necessarily fear or panic-selling. The press love to attribute news to big moves. Russia, Ebola, QE ending… these are all known and have been for months. Technical selling accounts for 80%…
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