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Quick Take Coffee, Corn, Hogs,


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QUICK TAKES

September 16, 2019

COFFEE,

As we know Coffee had been in an extended downtrend reaching the point where the negative indicator had reached a point of positive equivalency. The term of positive equivalency is a bit hard to explain but in simplest term it happens when the negative indicator becomes so overdone the positive indicator actually signals the potential of a corrective rally. Once Coffee reached the point of positive equivalency five weeks ago it has slowly rebalanced the indicators to where as of last Fridays close Coffee is now rebalanced. I have mentioned it in the past but it is worth repeatingmany times. IN MY OPINION once the indicators reach a point of positive equivalency or negative equivalency it usually takes three to five week for said market to achieve rebalanced status. What to do? Coffee trend remains bearish. According to our model December Coffee needs a close this coming Friday of $110.40 to turn bearish bullish. Suggestion: Look for levels to sell.

CORN

Two weeks ago December Corn reached appoint of positive equivalency (for definition see Coffee comments above). It appears that last week it began it move to get rebalanced, which as you now know from comments above may take three to five weeks of positive moves to achieve. One should be aware there will probably be some turbulence after takeoff. What we know: December Corn is in a long term down trend, needing a Friday close at or above $4.59 to turn trend bullish. Suggestion: Look for levels to buy during period of rebalancing.

HOGS

Four weeks ago December Hogs reached appoint of positive equivalency (for definition see Coffee comments above). Since then while there has been turbulence the prices have recovered to the point of being rebalanced. This can get very interesting indeed. December Hogs according to our model need a close at or above $70.45 this Friday to turn market bullish. On Friday last the market closed at $68.70, only a $1.75 short of the value needed to reverse the Hogs. But, if December Hogs fail to turn bullish this Friday it will take a close of at least $76.45 the next Friday, and failing that a close of $78.10 the week after that. Suggestion: I stick with underlying trend and look for values to sell ALL THE WHILE USING STOP LOSSES.

My name is Lee Gaus if you would like to see the entire article or receive an introduction trial to our daily and weekly commentary click the link and sign up. If you have any questions you can reach me at 1-877-304-1369, 312-384-1166, or email me atlee@efggrp.com. If there is a commodity you would like me to address shoot me an email.

There is significant risk involved in trading futures and/or options on futures. Futures and/or options of futures trading may not be suitable for all investors. Investors should consider these risks and evaluate their suitability based on their financial conditions. Past performance is not indicative of future results.



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About the author


Lee A. Gaus is a forty year veteran of the commodity futures industry.  After graduation from Illinois State University Lee began his professional career with Cargill of Minneapolis and then moved to Archer Daniels Midland of Decatur, Illinois.  After stints in the areas of animal nutrition, soybean processing and grain merchandizing Lee began specializing in commodity futures trading.  After being transferred to Chicago Gaus rose to the position of Senior Vice-President.  In 1992 Gaus was a founding member of EFG Group, and later International Futures Group.  Gaus has always had a deep interest in what appears to be the random movement of numbers.   Today Gaus combines old formulas with formulas of his own design in an attempt to discover fair valuations.  

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