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Chart of the Day: Consolidation Near Bottom of Range in Corn Futures

Two things to note on this chart of Corn futures: 1) The clean failure test above the summer’s highs, followed by a sharp selloff to the bottom of the range. 2) Price is unable to rally strongly off of the support at the bottom of the range. This shows a lack of buying support, and sets up a good trade on a potential break below the bottom of the range. Note that this breakdown, should it occur, is another nail in the coffin of the summer’s strong uptrend—this would be a serious challenge to trend integrity.

This is one of the advantages to understanding a set of trading patterns as I outline in the the book. Whether you trade them as actual trades or not, they provide a good framework for market analysis and also give good insight into the balance of buying and selling pressure in the market at any time.


Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.
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