Tech Guy Opening Calls & Comments 5/3/23

July Wheat - Steady

July Corn - Steady to 1 Lower

Dec Corn - 1 to 2 Higher

July Beans - 1 Lower

Today's lesson is going to be on key reversals. What is it...What does it mean? How reliable is it? The technical (proper) definition for a bullish key reversal is a sell off below yesterday's low, then a rally to close above the previous day's range.

That is not as reliable as a bullish green bar which closes above the previous day's range, but also closes above the previous 3 or 4 day's closes. Therefore, I like to see them close higher than previous 3 or more day's close for more confidence that the low is in place for a while.

When a bullish key reversal occurs under my definition, the confidence is high that the market will be starting a rally after a down trend or corrective move. We have experienced 5 key reversals in the grains - 1 in July Beans last Friday, and 4 more today in July & December Corn, and in July & December Wheat.

I have been talking about an up move for a few days with these different grains making some sort of bottom formation, etc. It takes time. Today we have something definitive, something to sink our teeth into.

As it turns out, today, July Soybeans needed to test the key reversal low from Friday and in the process formed a well structured broadening bottom pattern - a low followed by a high, followed by a lower low, followed by a higher high, followed by a lower low still - 5 points.

It forms because the battle between the bulls & bears becomes more phrenetic and forceful and each side thinks they are winning by marking a more extreme swing point lower or higher. It looks like an expanding triangle. Check out The July bean 2 hour chart. If price can break above 1440, we will know the bears are in the coffin.

July Wheat sold off initially, then rallied to close above the blue line talked about yesterday and closed higher (+30 cents) than the previous 4 day's closes. A swing low point should be in place. Check out a blowup of the wheat daily chart.

July Corn ended up needing to test the 572 low from Friday then rallied sharply to mark a key reversal day, closing higher than the 4 previous closes. Here is the chart.

Here is the December Corn daily chart displaying its key reversal - today closed higher than the previous 3 days closes.

The lows marked in July & December Corn and July Wheat today are high confidence lows because of the nature of a key reversal - the bears that sold in the last 3 or 4 days are already under water before today's close and they're either trapped or trying to cover (get out of position). These lows should be in place for a while.

June Crude Oil looks horrible (for the bulls), as it looks like they are wanting to test the lows at 64.36. Today closed at 68.27. Here is the updated crude chart.