Spotting Sharks In Corn And Oil
Dragonfly Capital | Nov 20, 2014 12:46PM ET
The sight of sharks in a corn field brings to mind the cult movie Sharknado. Where else but in fiction would a shark end up in a corn field or an oil well?
Well broaden your thinking because there's a 'shark' in our midst.
Bearish Harmonic
The chart above depicts the ratio between Corn ETF (NYSE:CORN) and the crude oil ETF (NYSE:USO) -- complete with its own 'Shark' harmonic. The bearish harmonic triggered last Friday when the price ratio moved back down through point ‘D’. Now the targets lower come at a ratio of 0.85 and then 0.77 -- if the first level does not hold.
These moves are over 6% and 16% -- so they could make for a lucrative trade. It can be accomplished by either a Corn move lower or a reversal higher in oil, or both. At the moment, corn is starting to roll over as oil continues its downward movement.
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