We couldn’t take out the April high at 10218. We got to 11,195 Monday. I think that 10,710 is a reasonable downside target, after a one month, 1,300 point rally. The 1,300 point rally doesn’t get the attention of the mass media.
However, going into Election Tuesday, if we start with a tasty correction, there will be plenty of crying going on for the talking heads. I really like 10,700 level because it corresponds with the August highs from this summer. Those old resistance levels become good support, albeit sometimes temporarily, on the way back down. If 10,700 does not hold, look for 10555 and then 10,400.
A break to any of those supports would not be the end of the world. Quite simply, markets don’t just go straight up or straight down. Remember that 10,400 is the 1/2 point of the great melt down. Watch for that 10,400 level as a canary in a coal mine. Above it, and we’re cautiously bullish, below it, and you have to think about more downside slide.
Shift to Grains, for now, I am still bullish, grains are poised to extend their rallies into the end of the month of Friday. Cotton, however, seems to have finally hit the wall.
Good Trading
