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TFC Commodity Trading Forum

copy of follow up to original flyer *LINK*


Five months ago we mailed you an alert, warning that the grain markets had reached their tops. It stated that the grain markets would not make any new highs on the nearby chart. At that time, the high for nearby corn was $7.84 which was made on April 11. Nearby soybeans had reached $14.55 on February 10th, and Chicago wheat had been to $8.93 on February 9th. The alert warned of a coming drop that would send prices much lower, without any new highs being made on the nearby chart. That letter was dated April 30th 2011. Nearly all the public news discussion was of reasons to expect the grains to continue their march higher, just as they had been doing for the previous year. However, just as our alert stated, “this was about to change dramatically.” It is now time to check the record.

Chicago wheat has completely collapsed. Chicago wheat was reaching $8.30 at the time we prepared the alert. It made that top on April 26th. Wheat was quite volatile at the time. Prices were advancing rapidly that week, and as usual, all the talk was of higher and higher prices. Not only did we tell readers that the Feb 9th top would not be breached, we warned of an imminent drop in prices that was to take place. As you can see from the chart below, wheat’s highest point was the week of our public warning. December Chicago Wheat has since dropped over $3, without breaking the April 26th top!

Heading into the last of April, nearby Corn’s highest point was April 11 at $7.84. We went on record to declare this to be “the” top for the nearby chart. We missed Corn’s ultimate top by 16 cents as nearby corn hit $7.99 on June 9th. Corn traded above our identified price of $7.84 by 16 cents and for only 3 days, before collapsing 184 cents in 22 days. Even after the July 1st low, when corn rallied higher for some time, it never came back above the April price we identified as “the top”. This means our worst error in the alert was in only one of the three grain markets and by 16 cents and 3 days! Corn has now experienced an extraordinary drop, falling below support.

Our April 30th alert projected the February 10th nearby top of $14.55 as the ultimate top in Soybeans. Our confidence led us to tell all who would listen that this point would not be taken out.

In the months that followed our alert, there were historic floods, and in the same summer, an historic heat wave. Fundamentalists were wringing their hands predicting much higher prices to come for soybeans. Most everyone was looking for another impulsive move higher. We were different, calmly stating that the cycles were all coming in as tops, and that you should expect “much LOWER prices”. Armed with the knowledge of cycles, our publication simply prepared our readers for another chance to sell at elevated levels. The record now shows, that nearby soybeans NEVER DID BREAK the $14.55 top set on Feb 10, 2011. A double top was made when September Beans topped out at $14.56 on August 31, 2011. After reaching our identified resistance point a second time, prices have since collapsed once again.

We never changed our original position that “the tops were in”. There was no panic reversal of opinion as prices rallied to the top of the trading range just below our benchmark highs, no talk of “possible runs higher”. In fact our advice was just the opposite, consistently and emphatically stating that the grain markets WOULD NOT make any new highs on the nearby chart. This publication has been consistent for these many months in declaring that no new highs will be made. It is a rare accomplishment to accurately identify a market turn as a major change of trend. To further tell the public that a certain price will not be broken, and for it to come to pass, is something that should make the reader curious as to the possibilities of understanding market behavior. What’s more, these market tops unfolded in one of the most volatile times in history, making it much more difficult to identify an ultimate change in the trend.

It is very difficult and quite rare, to accurately project market behavior. However, as has now been publicly demonstrated, I believe that knowledge of cycles can unravel what the public sees as random market movements. This notion was put to the test on April 30th, 2011. That was the date we decided to go public and publish our first alert. We mailed a thousand newsletters warning readers that “the tops are in”. We also published this on the public forum on the website TFC.charts. There is really only one way an analyst can prove his/her effectiveness, and that is to demonstrate an understanding of market behavior in real time. To any objective observer, we believe this has been done. This was the motivation to go public and declare “the tops are in” on April 30th, 2011.

If you find this type of knowledge valuable, please visit grainmarkettiming.com.

Jon Brueggemann