A down correction or backfill can consist of a single A-B-C or 2 A-B-C's linked together, or a triangle that is numbered A-B-C-D-E. March Crude Oil appears to have extended it's correction yesterday to a 5 point triangle.
C was marked when crude tested the 78 level and traded down to about 77.50 on Wednesday. D was the up leg succeeding C, then E came down to test 77.50 and printed a 77.25 low.
Markets love to overshoot targets and old levels in order to stop out more participants - energy is built during this process. We don't know for sure that oil has completed the down correction, but this is what we have for now.
The volume was stellar on yesterday's low (the E point), so the odds favor a rally to test the B high around 88.60, at minimum. At that time, we will have a better idea if the fund buying will continue to 82 or higher. Check out these details on the updated March Crude chart.
We had some concerns from some clients that the consensus in March Soybeans was turning very negative. The first thing that comes to mind is that bearish news/feeling is usually the highest at a chart low point.
All we know for sure is that beans are trading in an up channel since October 19th. The top line is resistance and the lower up trending blue line is support. The last 2 days beans have been hugging above the lower line.
Because the trend is up it would take a really big force to reverse soybeans down. I don't know for sure, but it doesn't seem like South American weather is a huge story with enough power to reverse this market.
Also remember that 1508 is the top of the big triangle which has already been conquered and today's close is 1526.50. The odds are fairly high that beans will at least buy upwards to test the 1555 high. Please check out these details on the March Soybean chart.
November Soybeans are in a solid uptrend since January 25th.
March Bean Meal painted a Doji-like bar today, before it could test the lower blue line. A Doji in this context usually indicates fund buying the next day and at the very minimum, a test of the recent high of 508 is expected.
March Wheat has been giving the bulls fits the last 2 days, selling off and threatening a test of the 760 area. In fact, this is my line in the sand and if breached for very long in time could mean that prices want to go down to test the 745 area - this is less likely from what I see.
Tuesday's high came very close to testing the December 30 high of 799. There is a new blue line drawn there which is resistance currently and if for some reason this is a new neckline, prices may backfill more. Check out the updated March Wheat chart.
March Corn had a consolidation day, remaining above the up trendline, closing down .75 on the day. I will go more in depth with corn this weekend.