I am still looking for 3.20 / 4.00 in the next 12 months but, after going through the 2.70 target, I am less convinced it needs to correct to the 240 area first. The correction from the 3.00 had two possibilities:
1) Expanded flat - this idea places the third wave top at the first 297 target and everything since that has been part of the correction, which ended at the end of the 5 wave fall from 308 to 254. This my preferred view, as long as the market stays above 254.
2) Zig-Zag correction - the other possibility places the third wave top at 308 and that this last 5 wave down is part of an ABC correction that goes to 240/220. This recent consolidation might just be the B wave of this correction. Not impossible, but not my opinion now.
If this current move starts getting impulsive, then I think the first hypothesis will be confirmed. Impulsive should be a big move up that is sustained.
* bollinger bands have contracted substantially suggesting an impending breakout.
* daily stochastic has signaled a buy
* daily candles offer nothing
* BMF/NY Arbitrage strengthening - suggest market has to go up, especially considering that there will be more fine cup this year and yet the diffs are getting more expensive.
* Reverse H&S pattern seen clearly on the 60 minute chart
* Point and figure looking like a breakout.
* Open interest - last six months the correlations have been weaker, but none the less, it seems to be setting up for a rally.
-- early invalidation can be had at 265/261
...oh, and I almost forgot, SOMAR is placing this year's frost risk the highest in 10 years. As I sit, freezing in Santos, I buy it.
First - fundamental side. Not too useful in the short-term, but part of why I have the mkt at 4.00 eventually.
S&D - basically, if everything goes well (a Brazil crop of 59 mil in 12/13, for example), the situation will remain tight. If something goes, wrong, well....
Weekly - thought we'd try for those boxes, but am less convinced now. Volume picking up, but OI dropping.
Point and Figure- pattern is similar to sugar's recent reversal up. As each of these MovAve get taken out, the new upswing should be confirmed. Only good target for now is 307. But too far away to bank on in the short term. Pattern is a catapult.
60 Min - reverse H&S. Big H&S too. But these obvious H&S seem to be a trap. Id suspect at least 280 regardless of trend.
Funds- too much liquidation for a bull market. Net short option position.
Merchant position - quite a bit of options protecting the upside, but the further this rises, the more bullish it gets.
