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For: Wednesday 03-31-2010

Exhaustion Gap?

The corn market sank after the USDA report was released this morning. We had corn for July delivery gap lower as soybeans plunged lower. This could be an exhaustion gap. We also have July corn hitting the reverse trend line that forms the possible descending wedge pattern. Using the volatility that we have after the report we will look to sell out of the money put options.

Also as we looking at the recent “merged” market profile chart, we see the corn market closing in on support from the congestion area from late summer into early fall.

Aggressive traders may opt to use futures. As always please consult your personal broker at Great Pacific Trading Company to see if this trade is suitable for your account.

Trade Recommendation: Sell the July 330 corn put for a credit of nine cents on a limit. Risk to a close below 350 or the option tripling in value. (>$900 not including commissions and fees), Look to take profits if the option premium trades below one cent.