Tuesday, July 22, 2014

JJG Grains ETN Daily Chart Downward-Sloping Channel Falling Wedge Oversold Positive Divergence

The drop in corn and wheat prices has been spectacular. JJG is a grain ETN that shows the carnage. The move lower shows inflation fears subsiding and turning into disinflationary fears. Corn is in many products and a requirement for raising beef, pork and chicken so the food inflation at the supermarket will relax moving forward. The blue downward-sloping channel is in play. JJG is beaten like a rented mule but note that the green lines show universal positive divergence across all indicators, oversold conditions, and a falling wedge pattern (bullish). If you are a nimble trader, this would be a nice long trade to jump into for a quick pop. The weekly chart remains weak so you have to take the money and run once it launches. A move up to the bottom rail of the channel and horizontal support at 40-ish is an upside target. Keystone does not hold a position in JJG currently.

The inflation-deflation debate will rage on but the chart shows that the food inflation is deflating. JJG will bounce but then stagger sideways even making new lows moving forward say through 35-43 for the weeks and months ahead. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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