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Re: May Corn Observations #3/Wayne

Hi Wayne,

Well, I had my "hat on backwards" !!!

My quick thought on this was WRONG !!

Assuming at tomorrow's 9.30am CT re-open (where a healthy move usually occurs) that price would be capped at 738.25 the new limit up. I'm assuming the clock doesn't reset then - would have to verify that.

If you are long at "limit up" you can get out by just selling for a little less. There are plenty of takers queued up.

But not the case if you are SHORT !!! You are screwed.
If we wanted to look at a potential game plan and see what the risks are .......
[My thinking was that Corn would pull back to at least the 640 area before this happened. Suppose this "limit up" today and "near limit up" tonight is just a knee jerk reaction to the USDA report and "sanity prevails" in the morning. Corn could drop substantially at the 9.30am CT re-open, maybe even "limit down". In which case you could make "good money".

[BUTTTT Corn is already down to 725 and this all may be moot before I finish writing this !!!!]

OK, suppose you shorted at 730 tonight, max. price would be limited to 738.25 until next trade day if things went against you. (I'm assuming it pegs limit up again tonight.)

Then you are exposed to another potential 45 limit up (not sure if it goes to 60?) before you can get out.

Then there is the 742 resistance that might hold ??

So the upside risk is:
Short point price to 738.25
To next resistance at 742
Another 45 limit up to 783.25
Another 60 limit up (if increases)to 798.25

And now we are at the magic 800 all time high !!!
- I really doubt it will get any where near these prices unless they cover the mid west with water !!!!

Well, enough here, we can chew on this a bit ....

My thought is .... It will max out somewhere around where it is and then drop considerably.


Messages In This Thread

Re: May Corn Observations #3/Wayne