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Chart of the Day: Pattern Breakdown in Corn

Grains have had dramatic uptrends for most of the summer. At A on this chart, we were looking at a possible long entry—had prices quickly recovered back above the bottom of the range, this would have been a classic Wyckoff spring, and a strong signal to buy for at least a pop toward to the top of the range. In this case, a long could have had significant upside potential should the top of the range have broken and the uptrend continued. However, flexibility is essential; in this case, the pattern did not play out as there was no recovery above the bottom of the range. The small rally attempt actually marked a small bear flag, and the most recent breakdown on this chart probably marks the end of the summer’s trends in Grains.

AdamHGrimes

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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