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Tech Guy Opening Calls & Comments 1/4/22

March Wheat - 3 to 4 Higher

March Corn - 4 to 5 Higher

March Beans - 2 to 4 Higher

One reason technical analysis is difficult - there are so many different ways to see things and define what you see and so many twists and turns. There are multiple time frame charts for the same instrument to reconcile, but I try to keep explanations as simple as possible.

The rhetorical question for any market participant - are you daytrading, swing trading (a few days) or position trading/hedging (weeks to months). The correction going on in the grains this week is in that grey area - a short downtrend in a daily and weekly uptrend.

Also, often times the correction down will begin from an important level that I have highlighted - I will talk about price getting above a line or lines. I hope y'all have been picking up on these areas even if I am not explicitly saying a correction starts "now". The June gap in March Soybeans, the line in March Wheat, the 3 lines in March Corn are all examples of what I'm trying to convey.

In the end, I hope my analysis helps you make more money.

The March Wheat situation is a brand new uptrend beginning on the weekly chart. We have been following the smaller waves (legs) on the 2 and 4 hour charts for 3-4 weeks. The "close above this line important" line turned out to be the end of the first impulse. It had 3 up weeks in a row, now it is correcting that first leg. It is common for the first correction to be more than a 62% retracement down.

Today, March Wheat went to 71% down from last weeks high. I think this is very near where #2 down will terminate. We are looking at the weekly wheat today. The low of 2 bars back is 738.75. The low/close of the bar before the exhaustion gap is 737.25 - 5 bars to the left of this week's bar. Draw a horizontal line here in your minds eye - these price levels are solid weekly support and the next leg up should begin from 737-745.

For reference, here is today's 4 hour March wheat chart - It has 11-13 zigzags.

The next upleg should have more UP energy and be a sharper curve up.

I have changed some lines on the March Corn chart (there's a new pattern), now that price blew past my support levels and we have a serious down leg. The most likely scenario is that an inverted head & shoulders has formed with this week's down move being the right shoulder.

The distance from the neckline to the head is 46 cents, so the upside target will be about 730, 685 (Friday's high) plus 46. Take a look at this pattern.

730 also equals the top of the big gap on the corn daily continuation chart that is highlighted with the a red horizontal price line. Price level determinations that have 2 different sources, such as this, gives you a higher confidence on the target.

The March Soybean contract did hold my support level near 1484. This was the steepest uptrend line drawn on the daily chart. I don't think soybeans needs to sell off much more, but worst case scenario - the lower trendline comes in around the 1455 level. Also, I believe the up move will continue after the next close that we have above 1508.

February Crude Oil was also weak today and traded a bit past the lower support levels around 73.65 - today's low was 72.73. Price could test the Dec 12th low of 70.08 or find traction above that while forming an inverted head & shoulders. New resistance is the former support levels at the 77.80 red line, and then 81.20. Here is today's chart. See if you can spot the possible inverted head & shoulders.


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