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Tech Guy Early Comments 9/21/23

From yesterday's December Corn comments:

"corn will most likely back fill first and test 475 or 473.50 below, before seeing higher prices."

The total trading volume for the pit (day) session in December Corn today was about 65,000 contracts. This is very average, going back 2 months. However, almost half the volume for the day (28,000-30,000) was in a 1.25 cent range - 5 ticks.

Most importantly, the 29,000 contracts traded between 475.75 and 474.50. This is very near the area (475-473.50) we were looking for the funds to defend on the downside - where support should be.

The range for the pit session was 480-474 - 6 cents. Therefore, we have good evidence ($$) that 473.50-475 is solid support and that tomorrow will more likely be an up day - the fund buyers will defend the trades they put on today.

Resistance will be yesterday's high of 483, then 490-492 above that. Check out today's December Corn 2 hour chart. Notice the volume on the trade ladder at the bottom compared to prices above.

Too early in the beans. I knew a washout could occur, but underestimated the magnitude, because beans can be wild. When I state a tight support or resistance level as in 1315 for today it means that below the level needs to be protected if necessary for the market participant in question, especially if confidence is barely more than 50/50.

I don't know if tomorrow will be an up day, but it surely could, because the trading volume for the entire day was well above average, and many sell stops & new shorts were executed today by folks who were long, expecting for support to hold. The low today was 1293, and the August 8th low to the left is 1282.

From the commitment of traders data and the daily reporting of volume and open interest from the cme, soybean open interest is up +57,474 from September 5th till yesterday.

WE know from the COT that most of this volume is spreads and only 3400 was short traders. The rule of thumb is with a down move + increase OI = bearish, but I have never seen this in the grains.

Also, according to Elliot, beans are correcting. I have seen fund longs extend their position during a correction. It has my attention - the open interest increase. I don't believe it is bearish. And, this is a lot of magnitude, +57,000 in 2 weeks. It speaks of intention. Not trying to be mysterious, we simply have to connect the dots.

Bigger picture, the November beans are continuing to build up pressure. If I'm wrong about the details for any given day, don't lose sight of what I'm saying bigger picture. Here is the daily picture of the inverted head & shoulders working on the daily November chart.

December Chicago Wheat violated the 581 support today by a nickel or so. I don't know if it will test the 570 low to the left or not. However, December KC Wheat did test it's low to the left by 1 tick today.

Therefore, tomorrow could be an up day, but confidence is shaken. The lower blue channel line comes in at 703.50, so normal support is between 709 and 703.50 for KC wheat. Professional traders will be buying in this area.

Here is the continuation KC Wheat daily chart with the trading channel.

The buyers showed up above 88 today in crude oil. I think 88 will hold, but if not 85 could come into play. Check it out.


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