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Tech Guy Independence Day Comments 7/4/23

The December Corn Impulse wave was cancelled out because the selloff of wave 2 went down to test the low of wave 1 during yesterday's trading session. Now, the price action in corn becomes a continuation of the big correction that began last summer, instead of an impulse rally - it becomes an extended A-B-C-D-E correction.


The price action also marks a double bottom pattern from the May 18th low, with D & E becoming the double bottom points. The support in the 500-490 area is fairly long term, so it should hold again for another up impulse to begin.


I was talking with Lance on this matter, and we both agreed that because of the season (corn hasn't even pollinated yet), December corn price is more likely to mark up higher than leak lower from here.


If it was August 4th currently, we might be talking more about selling because the trade would/will have a better idea of the crop size. Also of note, was Monday's bar - it was quite Doji-like (open/close very close to the same). Therefore, we have more evidence that a new rally has the best odds. Check out the updated December daily corn chart - see the labeled correction points.


The first up impulse wave (Big1) in August soybeans was 254 cents. Next, came the Big 2 correction down and then big3 up began just before the report last Friday. By the rules of Elliot wave, #3 up should be longer than #1.


By using some of the Fibonacci ratios, we can look at a possibility into how far the #3 wave will rally. I'm thinking it will be no shorter that 1.5 X 254. There are different schools of thought as to where you begin counting the leg length.


Traditionally, you start at the bottom of 2, but I have heard of some analysts starting the counting at the top of 1. For instance, 1.62 X 254 = 411. The bottom of 2 is 1351, so 411 + 1351 = 1762 as a possibility.


Alternately, the top or terminus of #1 is 1447. 411 + 1447 = 1858.


There is also another way to estimate price targets for August soybeans that is related to the length of the range from high to the recent low of 1193.25 - measuring high to low, kind of like a double bottom (W) or a head & shoulders.


You will see that calculation on the chart - upper left. Here is Monday's August soybean 8 hour chart.


September wheat leaked about 5 cents down from last Friday's close. The number 2 corrective leg has now retraced about 62% of the number 1 up impulse. As I have stated, the first correction in an uptrend can be very deep, so will 640 hold? Don't know.


There is strong support 20 cents down at 620 - I don't believe wheat will retrace the entirety of the up move. Here is the updated September wheat chart.


Happy Independence DAY!



4件のコメント


Hello,

What is your thoughts on the significance of the gap in the December daily corn chart made last May of 2022 at around $6.70? Do you think the market will try to fill it?


Also, I would enjoy more info on the cattle markets as well. Thanks!

いいね!
Tech Guy
Tech Guy
2023年7月05日
返信先

Hi there. Thanks for your question!

That $6.70 gap will get filled at some point because it is unfinished business. It is a magnet. However, price will have to uptrend back to the June 21st high at 629.75 before we eyeball that gap - the gap is still in the realm of possibility at this point.


The corn is still early in the life cycle and 490-500 is strong weekly support so I do believe a rally will begin again - 630 is a good target for the summer, we just don't know beyond that yet. Pollination, grain fill?


Yessir, I will get back to cattle within the next 2 days, Live Cattle are so strong. Very impressive. They will…

いいね!

Which class of wheat should SRW producers follow in the weekly recommendations? Seems that is left out.

How about a cattle market update? Been a minute for them. Thanks!

いいね!
Tech Guy
Tech Guy
2023年7月05日
返信先

Hi There Clint. I let Roger know you want to hear about SRW in the weekly recs. I don't know why he left soft wheat out last week. He said he will reach out to you.


...and I will post a cattle chart and comments in the next couple of days. Do you prefer a weekly chart or the daily outlook? Thankyou for asking about cattle. It has been a while. I get so wrapped up in the grains this time of year.

いいね!
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