Market corrections stump a lot of traders. You can understand why: Here you are "riding" a trend, everything is fine – when all of a sudden, prices stop trending and go sideways. Or worse – they start to fall (or rise, which is bad news if you are shorting the market.)
Is this just a pause in the trend, or a trend reversal? What do you do: Stay in the trade or get out before it's too late?
Fundamental analysis can't help you here: The news of a "possible crop freeze" or "expectations of higher supply" do little to help you decide what to do with your trade NOW.
Technical analysis is much better suited for this purpose – Elliott wave analysis especially. First of all, Elliott says that corrections always develop in three overlapping waves that have a characteristic "messy" look. Secondly, Elliott describes a fixed number of corrective wave patterns. Which means that once you've identified the type of correction you're in, you can make a reasonable forecast of the path prices will take from here.
Here's an example. Since early March, Corn futures prices have been bouncing between 580 and 503. The choppy, overlapping structure of this month-long move prompted Elliott Wave International's Senior Commodities Analyst Jeffrey Kennedy to conclude in early March that Corn was likely mired in a corrective pattern knows as Expanded Flat.
Expanded Flat is a variation of Elliott's regular Flat correction. Both are three-wave moves, ABC. The difference is that…well, take a look.
In Expanded Flats, as you can see, wave B ends beyond the starting point of wave A, and wave C ends substantially below the ending point of wave A.
It was the knowledge of this very pattern that has allowed Jeffrey Kennedy to alert his Daily Futures Junctures subscribers in early March of two things. One, Corn prices were likely to keep going sideways for a while, and two – when this Expanded Flat was over, the larger trend would resume.
Well, in tonight's (March 27) Daily Futures Junctures, Jeffrey brings an important update to his subscribers regarding Corn – and also Wheat, which has been mired in a similar corrective move. "The Expanded Flat correction we identified in early March," writes Jeffrey, is likely "complete."
To learn the exact price targets for Corn and Wheat from here, read Jeffrey's March 27 Daily Futures Junctures online now, risk-free for 30 days. For details, please scroll below.