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Tech Guy Opening Calls & Comments 4/26/23

July Wheat - 2 Higher

July Corn - Steady to 1 Lower

July Beans - 2 Lower

Today we are talking about the continuation charts. These are always the front month and they roll from one month to the next either right before first notice day or until last trading day.

However, near the end of July, corn and beans roll from July to November for soybeans and July to December for corn. The reason some charting software rolls in this manner, is so the continuation chart follows the liquidity - September corn and August/September beans have much less trading volume.

2 or 3 different continuation charts for daily and weekly for all the grains is a lot of charts to keep up with, but they all have some affect in technical analysis - the market responds to all of the charts in one manner or another.

My charting software rolled to July today. All 3 grains went from May to July on the continuation chart. Therefore, the straight up July chart looks a bit different than the continuation. Because the Chicago Wheat market is at full carry out to May of 2024, today's bar is higher than yesterday's bar, even though there was a net loss of price for the day.

If traders feel the continuation chart is more important than the July chart, and they often do, yesterday could be a bottom. This is how I read it. Also, Tuesday's bar was Doji-like and today's bar was higher on the wheat continuation. You will see what I'm saying on the chart. Check it out.

Market turns in the grains often occur when the continuation chart rolls. Notice the 3 points on the bottom and 2 points on top of the range enclosed with blue lines going back to mid March around price 662. This pattern can signal that the bears have run out of energy and that the bulls have an opportunity. This is what I see.

Because the corn market is inverted, today's bar gapped down about 46 cents on the continuation. The effect on the daily corn continuation chart is a triple bottom or low, and today the roll caused price to test the March 10th low at 606.75 - it was the May contract on March 10th.

Here is today's corn continuation chart with the big gap and triple low.

On the July Corn daily chart, price tested yesterday's low and the bottom of the big triangle within 1 tick. Combining both corn charts in the analysis, it looks supportive to me. Here's the July Corn daily.

The soybean continuation daily chart gapped down 30 cents today because beans are also inverted - rolling to the July contract. The effect on this chart is a market that is testing a lower, upsloping trendline.

Today's bar also almost tested the May beans low of March 24th. You should be able to see these features on the chart the big gap down & the last swing low. Check out the beans continuation.

The 4 hour July Bean chart came within 3 ticks of testing yesterday's low and I still contend that July beans are completing the first corrective wave after the first up leg/wave in this sequence.

As I said, first wave corrections can be exceptionally deep because the bears think they can smell another down leg in earnest. However, if this chart is what I think it is, July soybeans should not test the March 24th low at 1383.75, but could test the March 24th low on the continuation at 1405 - today's close is 1415.75.

Look at it like this - if the test of the low price is accomplished on the continuation chart, it doesn't need to copy the same bit of business on the July chart. Here's today's July bean 4 hour chart.

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1 Comment

Do traders care about gaps on the continuation chart when the month switches the same way they care about gaps on a regular trading day?

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