To Recap:
On June 29th, we posted a contract low in CZ at 343 1/4. On Aug 5th, we posted an 8-month high at 438 3/4. I wrote last Friday about how critical a WEEKLY close above 4.30 would be to maintain the bull rally. Today, oddly, we traded up to 4.33 but then fell apart like wet paper towel holding a pound of potatoes. We broke down to 4.21, a 12 cent hair cut for the late-to-the party bulls.
For new crop beans, on July 1st, we posted a low at 8.94 in SX. Aug 5h gave us a high tick at 10.49. Today’s high at 10.48 1/2 looks suspiciously like a double-top in the making. SX really needs to settle forcefully above 10.50 to extend the rally.
If we fail here, look for a down move to 9.89 and on a bigger flush, 9.75-9.71.
For the wheat, quite an interesting move, and quite an interesting place to be on the charts.
On Jun 29th, the day before the USDA Acreage report, WZ was languishing at 4.83 1/2, and trust me… NO ONE was talking about a Russian Drought. The resulting rocket ship up to 8.68 on Aug 6th was, in a word, impressive. A 3.84 rally from low tick to high tick. What a difference 6 trading days makes… Today’s low at 687 1/2 was “only” a $ 1.80 cent hair cut for longs who came to the party too late, following the lead of the headlines in national media and, in particular, one well known CNBC pundit..
As for support, I like 6.76 for a 50% retracment and then if that fails, then 6.30 1/2 for the 62% retracment.
Monday morning quarterbacking is fun. Looking at a chart and saying, “Oh, I saw that coming” and actually taking advantage of that move are two entirely separate things.
Hoping, and sitting is not a marketing plan or a trading plan. Its amazing how many other wise smart people can freeze up in the face of a move like we’ve just seen.
Disciplined trading and, if you are a marketer, as a producer, is the difference between being happy with your money management and being left in the dust.
Who will get left in the dust at the end of this week?
Tune in to find out.
Good Trading
