Good evening, I just wanted to apologise because my first posting after the close was totally wrong. I was writing it with about ten other things going on at the same time, and I got a couple major items wrong. If you happened to read it and were confused, you were not the only one. I got some interesting email from readers.
That reminds me, if you like what I write, spread the word, leave a comment, send me an email, whatever. I am available for any question(s) you might have. I live in Chicago, on CST, so if you are in a different time zone or country, please feel free to email me.
OK, now for a re-cap of today’s action.. Very bullish in Soybeans, with negative correction mode in Gold, Silver, Crude, all in the face of a re-bounding dollar. We also had profit taking/breather session in the stock indexes after Wednesday’s new 8 month highs…
First the Grains:
Soybeans opened eight cents lower, posted a low at 961 1/2 and then freight trained higher through the afternoon, getting all the way up to 996 1/2 before some hedging came in and we settled at 990… All in all a great day, as the commodities de-coupled from crude oil and gold, which were both lower on the day…Even more impressive was the fact that beans rallied even as the dollar picked up 44 ticks, in a corrective bounce after its recent new 15 month lows….
As I wrote earlier, it looks as if the funds are getting an early start on their re-balancing, taking money from the crude oil and gold and putting it to work in the commodities…They started last week with Corn, now they are hitting the Beans, and most likely they will attend to the Wheat as well, if their pattern of buying, or apparent buying, holds true…
Technically there are two trend lines in the Beans to look at ….The first is the Bearish one, with an intersection this week around the 1018 1/2 area.. Remember that number,as we might see it tomorrow or Monday on continued buying strength…That trend line is formed by taking the Jun 12th high, at 1105, the Aug 13th High at 1068, the Oct 23rd high at 1029 1/4 and the Nov 4th high at 1022 1/2… Two point is all you need for a trend line, three is best, and four is very good. It re-enforces the significance of the trend line, as more and more people are abt to see it… It therefor acts as a magnet… The intersection point looks like the 1018 1/2 level…
Also for the SF (Jan Beans) we have a bullish trend-line below with the following points.. the Oct 6th low at 8883/4… the Nov 9th low at 951 3/4 and Nov 10th low at 952 3/4… We edged down to it this morning on that low at 961 1/2, and I think we rallied so hard because we didn’t penetrate it, but instead rallied like a rocket after flirting with crossing below…
In the Dec Corn (CZ) WE have two trend lines to look at as well.. The bullish one is from the following three points: Sep 21st low at 310, Nov 2nd low at 359 1/4, and the third is Nov 9th low at 365 1/4…
Above the market, we have a bear trend line: Jun 10th high at 471 3/4 and Oct 23rd high at 413 1/2…
These are two lines bordering the trade which you should watch in the corn.
In the Dec Wheat (WZ) The bull line is as follows: Oct 5th low at 439 1/4…Nov 2nd low at 487 3/4 and the Nov 8th low at 496 3/4…
The bearish trend line above the market is as follows : Jun 1st high at 725 1/2, and the Oct 23rd high at 574 3/4….
Granted a trendline with less than 3 points is sometimes suspect, but it would be nice to be able to call that third point based on what the first two points are predicting…
Finally, we had an outside-day-up in the Soybeans (SF)… We had a lower low and a higher high and we settled higher… hence the descriptive term, outside-day-up.. Generally a bullish continuation pattern, but nothing is infallible… I have seen wicked reversals after such days as well, but more often than not, its a sign that the trend is strong and in continuation mode.
Conversely, in the Gold contract, we had a decisive outside-day-down today, with December Gold posting a new all time high at 1,123.40, then slamming on the breaks, heading south of the border, to settle down at 1,102.70, its low tick for the trading session…In other words, we had a new high, then watched the contract bull back twenty dollars and change… In effect, punishing all the momentum traders who bought the new highs, looking for continuation..
Whew, OK, well that about covers the major things I noticed today…
Good Trading Tomorrow