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Corn Futures: Don't Force-Fit Your Analysis
If a market doesn't conform to your expectations, should you "stick to your guns" or "cut and run"?
If you’ve ever followed the financial markets for more than even a few minutes, you know that they rarely do exactly what you want them to do.
Markets love to throw curve balls your way, and any successful trader will tell you that the most effective trading strategies are those that allow you to roll with what the market gives you.
The Elliott Wave Principle is a system that allows you that much-needed versatility – while, and this very important, still helping you to maintain your broader expectations for that market.
For example, take a look at the corn futures market that our Senior Commodities Analyst Jeffrey Kennedy breaks down in tonight’s (April 2) issue of his Daily Future Junctures:
"In Monday night's update, I illustrated the path that I thought corn prices would take, and that included a [selloff]. Obviously, corn wasn't thinking the same thing I was because prices have continued steadily higher."
Curve ball? You bet. But instead of having to junk his entire analysis and start over, the flexibility of the Wave Principle allows Jeffrey to shift his short-term expectations:
"I could be insistent regarding a pullback. However, doing so would be foolish. Why? Good analysis must always be unbiased. Otherwise, you find yourself force-fitting price action into a preconceived scenario, the result of which is always ugly. So, instead of continuing to demand Corn prices pullback in wave, I would like to offer a more aggressively bullish labeling, which is illustrated in Chart 2…"
This isn’t an isolated example of the Wave Principle's "build-in" flexibility. Because the Principle teaches that markets are fractal – i.e., each market move is a “wave” that is both part of a larger wave and is itself also made up of smaller waves – it allows you to piece together market fluctuations one at a time to understand the broader picture.
To learn more about the Wave Principle and find out just how much higher Jeffrey believes corn has to go, try a 30-day, risk-free subscription to EWI's Futures Junctures Service. (Please scroll below for details.)