Tech Guy Opening Calls & Comments 11/22/22
Dec Wheat - Steady
Dec Corn - 1 to 2 Higher
Jan Beans - Steady to 1 Higher
Happy Thanksgiving to everybody!
Market participants are winding down for the holiday and you can see this in the grain trade as the ranges today were very small - Dec Corn marked the smallest day's range in many months - less than 7 cents, closing down 2.
Dec Wheat was down about 6 cents today but did not take out yesterday's low - still hugging the monthly trendline from 2007. Jan Soybeans made a higher high today which is bullish even though it closed down a couple.
Holidays can sometimes be a pivot point or breakout time in the grains. For now they are all very idle just accumulating energy. We will have to see what tomorrow, Friday and Monday bring.
Someone had a question about what daily volume and open interest means or indicates. Volume and open interest are both a total count of all the traders - big and small specs, merchants, etc, in 1 day. These numbers are published every day right here: https://www.cmegroup.com/market-data/volume-open-interest/agriculture-commodities-volume.html
Volume is total number of round turns per day. Therefore it is a trader buying and selling in the same day - a day trade. Overall, daily volume is the total number of trades open and closed in the same day. Then open interest is the total number of positions which are being held or staying open that day. If a trader buys 1 contract of corn today and doesn't close the position today, tomorrow this will count as +1 in total open interest for that day...or minus 1 if a trader closes their position. Therefore, volume and open interest are updated daily.
A note on corn open interest: it has decreased over the last 5 trading days while Dec Corn has traded sideways in a small range. This typically indicates the fund and commercial shorts are covering their positions - this is bullish.
Jan Crude Oil had nice follow through buying today and was up +1.06 to 81.10 on the day. After yesterday's bloodbath/capitulation, the strong fund buyers are beginning to build a long position - this means the smart trader is holding longs and/or buying more contracts. Again, yesterday was an extreme/dramatic day that is quite rare - today's close is 5.83 higher than Monday's low!
Continuing the Dec S&P Elliot wave lesson and analysis - If you will remember we have counted big1-up, big2-down, big3-up, and working on big-4 down correction. Don't worry, I'm posting the updated chart.
And within big1 & 3 is a smaller 1-2-3-4-5 count. Within big-2 & 4 is an a-b-c or a-b-c-d-e count. It appears the S&P has completed big-4 and is just now embarking on big-5 UP. Also of note, within impulses (up) each subsequent leg can be longer or shorter. When big trends change from down to up, like the Dec S&P did on Oct 10th, often times the first upleg is a starting diagonal - the 3 and 5 are becoming shorter as prices rise - this occurs because in the big picture, some of the bears still have not given up!
I am anticipating that the current impulse up (big-5) will terminate at roughly 4175, which is an old swing high to the left before the low was marked at 3502 - this is about $66 higher than today's close of 4009.25. The 3rd up leg (big-3) was 346 points, so I expect big-5 to be roughly 270 points up from big-4 to 4175 where a bigger correction down should occur.
The lengths of the up legs are labeled with the number with a red arrow pointing at it. All important points are labeled on the chart - it's a lot to take in, but worth the study if you would like to learn.
I am also showing you an 8 hour chart so you can see price action back farther - the labeling's will be jumbled up, but the point is that you see farther to the left. Then compare the 2 charts in the minds eye.
This is good news for long term investors and 401 (k) plans. The S&P rally should continue through Christmas - it's called the Santa Claus rally.