Today I shorted soybeans, corn and sugar.I’ve had a few questions about the setups and trades; let’s look at them.
Looking at the daily chart for November Soybean futures, today had a breakout setup.Monday had the narrowest trading range of the previous four sessions; it was also a doji. This meant I was looking for a directional move today, selling the market as it broke down, looking for the selloff to extend itself (I also would have considered buying on strength).Both MACD and momentum gave bear signals.For MACD, the retracement of the blue MACD line back toward the red signal line was a potential bearish signal on renewed price weakness. Momentum had risen to the highest level in nearly two weeks, and yesterday’s high formed a (roughly) double top with last week’s high.
On the chart, 911-3 was a 50% retracement of the Thursday to Monday rally; breaking back under that would be a short sale trigger; this lined up with the first breakout sale point at yesterday’s low of 912. The overnight low was 510-6; so this morning I was looking to sell when that support was broken.
I sold short at 910-0, when the overnight low was broken.This led to a drop to next Fibonacci retracement support at 904-5.The break of psychological support at 900-0 added to the selling pressure.As it got late in the session, it regained 900-0; as it had fallen over 40 cents in two days; I chose to cover at 900-0.There was more short covering late in the session, and it closed at 905-0.
There was a good breakout setup in soybeans today.
December Corn also had a narrow range day breakout setup.As with soybeans, MACD and momentum said to be looking for a short sale.Yesterday’s low of 328-4 lined up with the last swing low of 328-0; so I sold at 327-4 when that low was taken out.Dec Corn saw additional pressure when last week’s low of 324-4 was taken out.Although it was closing into new lows for the move, I chose to cover corn as well.Today was a big down day, and it’s been my experience that breakout trades often retrace the following day.Anyway, as a swing trader, we’re now freed up to look for new trades tomorrow. I also shorted October Sugar futures as well; given the correlation between sugar and grains; I think I’ll still be able to participate on further commodity selloff, without having the exposure we did today.
Corn futures had a good breakout sale
This is a recap of trades from my Swing Trader’s Insight advisory service. For information on STI, and to sign up for a free two week trial, visit here.
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