Soft red winter wheat futures at the Chicago Board of Trade have been trading sideways at lower price levels for nearly two months.
The key “outside markets” have had a major influence on the wheat market and other grains. These key outside markets include the value of the U.S. dollar versus the other major currencies, crude oil and the U.S. stock market. It’s a fact that markets are interrelated and always have been, suggesting the importance of intermarket analysis.
This week, reports of “winter kill” and a hard freeze in hard red winter wheat regions of the U.S. Plains have somewhat supported the wheat market.
The next major downside technical price objective for the bears is pushing and closing prices below solid technical support at the contract low of $4.71. Bulls’ next upside price objective is to push and close March futures prices above solid technical resistance at $5.50 a bushel.
From an intermarket analysis perspective provided by VantagePoint Intermarket Analysis Software (www.TraderTech.com), technical odds favor a near-term price recovery in March wheat futures. VantagePoint is a valuable trading tool from which a trader can glean clues on potential near-term price trend changes or continuation of present trends. These near-term clues provided by VantagePoint can and do give a trader a key edge.
The VantagePoint daily bar chart for March wheat shows that the predicted medium-term exponential moving average of typical prices (blue line) has just crossed above the actual medium-term simple moving average of the close (black line), which is a near-term bullish signal.
Source: VantagePoint Intermarket Analysis Software
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Also note on the daily chart for March wheat futures that VantagePoint’s Predicted Neural Index is presently reading 1.00, also suggesting upside price pressure in the near term.
When the predicted simple three-day moving average value of typical prices is greater than today’s actual three-day moving average value, the Predicted Neural Index is 1.00, indicating that the market is expected to move higher over the next two days. When the predicted simple three-day moving average value of typical prices is less than today’s actual three-day moving average value, the Predicted Neural Index is 0.00, indicating the market is expected to move lower over the next two days.
The Predicted Neural Index, a proprietary VantagePoint indicator, is either correct or incorrect so its performance can be measured in terms of percent correct to produce the accuracy statistics cited for VantagePoint, which has a predictive accuracy rate of around 80% across a wide range of markets and time spans in ongoing research.
