Today’s low in Dow Jones futures was 30 ticks below the 12,775 level. This was a test of the first Fibonacci retracement at 38%. 38 % of what? 38% of the rally from the November 16th low at 12,434 up to the high last Friday at 12,982 That was 548 point rally in 6 trading sessions.
I wrote about this level a few entries ago. I really don’t want to step in and buy until we test the 50% level down at 12,708. I’d be using that level to cover shorts and initiate small long positions.
The level below there I like is the 62% level at 12,643.
So to recap,,, I’d be selling rallies here and using these support levels to take profits and initiate speculative longs.
In the grains, we continue to be moving towards good retracements. The bullish stories are starting to come across the wires. A good contact down in Argentina emailed me this morning talking about projected decreases in corn yields. It may result in more beans being planted vs corn.
Food for thought. The grain bull drums are starting to beat in the distance.
CER
