Tech Guy Early Comments 3/1/23
From yesterday's May Corn comments: "I found a balance line which comes in tomorrow around the 623-622 level which should provide some stopping volume by the bulls."
May Corn missed the balance (622) line by 1 tick today on the low of 622.25. I wasn't expecting the fund bulls showing to be this spectacular on a straight down 7 cents and straight back up 15 cents on heavy volume.
It was the highest volume day on the corn continuation chart for 6 to 7 months or more. Higher than the Final production report in January and higher than the volume on that tremendous July 2022 low of 566.
What this data tells us is that today's low will very likely be in place for months. Check out the corn chart here with the balance line and today's volume bar. Blow up the chart so you can compare all the volume bars going to the left.
Today's May Soybeans was also an impressive fund buying day, with beans closing up +15.50 and also closing above the bottom of yesterday's 1st 30 minute bar with the big, capitulative volume. This bean low should also be in place for a while. Check out the 30 minute chart here to see these details.
Remember when May Corn initially sold off and down out of the triangle and I stated, "corn is starting it's motion now". This text is from that day - "We know for sure that corn is in motion starting today - there will be a trend. The narrow/sideways trade of late is done. The breakout confirms this part whether it's up or down."
What I failed to say was "up AND down." Corn and soybeans are more likely going to trend up now, with targets above the January/February highs. They are less likely to trade back up into the old ranges and get stuck again - that bond is broken now.
The physics law roughly says and I'm paraphrasing, that when a body is acting a particular way (like consolidating), it will continue to act that same way until and unless a greater force acts upon the body to change the way it's acting.
Last Thursday, the big force occurred with the breakout/down and caused the behavior of corn and beans to change to trending motion. Hope this makes some sense - this is the best way to explain - it is very basic information but difficult to communicate.
May Wheat is continuing to hold its own. It is forming a bottom pattern - triple low. 3 different days now the bears have sold off below the blue trend line and the bulls have ripped it back up on those same days. Today closed up about a dime from the low of 701.75
To recap, May Wheat's pattern is a triple bottom within a larger triple bottom that is likely to begin rallying towards the neckline at 797. Here is the updated chart.
The breakaway gap is confirmed in April Natural Gas and the rally has resolve. $4.05 to $4.20 continues to be the next upside objective area which you will see on today's 4 hour bar chart.
April Crude Oil traded between $76.12 and $77.85 today, closing within a few ticks of the high. Crude looks like it wants to make a run up to the $80 - 81 level. I Will have an updated chart in the next few days.