Quite honestly, the most important event of the week was the confirmation hearings for Janet Yellen. She appears to be at least 10 times smarter than any of the Senators interviewing her. Last week at this time, I discussed the dysfunctional aspect of these markets which can’t seem to get a handle on the tapering issue. Folks, if Janet Yellen is any indication they aren’t even close to a taper. She didn’t want to come out and say it even though there was one exchange but in all good faith, the Fed can’t start tapering until something that resembles fiscal policy takes shape. That might be a long time with a President approval at 39%. I think the GOP smells blood and why would they help this President when they’ve done a textbook job of hindering the President to this point. Janet Yellen sounds exactly like Ben Bernanke and is what markets need right now. Every few days some Fed president comes out and floats a trial balloon about cutting the bond buying program. Folks, this is just a trial balloon. They won’t start tapering at least until Bernanke leaves at the end of January and quite possibly not until we get into the next election season. Do you really think they’ll dampen the mood for Christmas shopping by announcing tapering in December?
Think about these things this week as you trade these markets. If you get sucked into every trial balloon, you are going to lose a lot of money. Think about where the feet grow and you’ll be better off. There’s never a guarantee they won’t taper but odds favor they won’t.
Finally, there is a very important test materializing in corn right now. We believe corn to be in at least a cyclical bear market but exactly a week ago it traced out a Gann symmetry of being down 315 points in 314 days. It had two really good days off the bottom but last week elected to retest the bottom. The risk is now to bears who would need to cover in a hurry if prices turn here as the symmetry suggests that if we get an accumulation day it could turn into a substantial move higher.