Tech Guy Opening Calls & Comments 4/25/23
July KC Wheat - Steady
July Corn - Steady to 1 Higher
July Beans - Steady to 1 Lower
The overarching picture going on in corn currently is that the July and December contracts are treading on substantial long term support. The December daily chart is also hovering around the lows printed right after the war began last year.
Both charts are trading near the low end of large, 12-13 month triangle range. Based on the charts, it looks to me like there is very little to no risk premium in these markets. 2 pictures are worth 2000 words, in this case.
Also, the July Corn daily chart, painted a Doji bar today. When Dojis occur after a run (down in this case), it often times is indicative of a market turn - back up in this case.
This situation is as simple and straightforward as charts can be. Also on the July Corn chart, the high to low of the triangle (last summer's selloff) is 186 cents. When (probably) July Corn rallies to 640 and holds above this, you tack on 186 cents to the 640 price to get an upside target.
This may seem like an extreme, head in the clouds possibility to some or most of you, but these markets are extremely overbalanced to the downside (oversold), and like a pendulum, the laws of nature must be expressed.
Check out these big triangles and the Doji on today's July bar. The July contract is first.
Both corn and beans roll over to July contract on the continuation charts on Thursday or Friday. It will be interesting to see what they look like because of the big price inversions - the effect will be a gap down that will want to get filled quickly.
The July Soybean correction has retraced 77% of the up move. This is close to a Fibonacci number of 78% and first corrections can be very deep, even 90% - the bears are still holding onto a lot of hope that they can cause another down leg.
To clarify "first correction", I mean that the last small up leg (labeled up impulse on chart) was the first up leg after the bigger, 3 wave down correction which ended on March 23rd and we are currently in the first corrective down leg.
Today or tomorrow should be the beginning of the next rally. If you are interested, 9 small legs (waves) can be counted in the up move. 5, 9 or 13 legs = impulse and 3 or 7 = correction. Check out the 4 hour July Bean chart.
We are looking at the KC Wheat continuation chart which is still the May contract until Thursday or so. KC is currently in a down move which should result in a higher low. This chart has been consolidating / narrow, sideways channel since last July. It is trading at a premium to Chicago wheat.
The weekly cotton chart is still trading in a narrow/sideways range between 76 and 85. I will give a heads up when something changes.
June Crude Oil still looks like it wants to close the bottom of the gap down below at 75.72. Today's close was 77.13. Here is today's crude 4 hour chart - notice the slightly lower low today.