7 Days ago, the wheat market popped higher, in fact, from the low to Monday’s 6-week high, the contract rallied 37 cents. Today we’ve had a sharp sell off, after trying to rally higher.
The funds look to have added to shorts in wheat. The 8-month T-line, shown below in WK and WN, illustrates how these longer dated t-lines can come into play. If we were to settle below that T-line for the week, both bears and recent longs would have to re-evaluate their positions.
This chart shows how the market tends to “rally up the staircase”, but corrects by “falling down the elevator shaft”. At the end of the day, bull or bear, watching very simple Trend lines can sometimes have great value.
