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Tech Guy Opening Calls & Comments 7/31/23

Sep Wheat - 2 to 3 Higher

Dec Corn - Steady to 1 Higher

Nov Beans - Steady to 1 Lower

Today was the last day of the month. Often times, the market experiences some sort of anomalous price action because certain large traders need to even or tweak their positions to make the balance sheet look like they want it to look.

I believe this is what occurred today, with practically all support levels being taken out for the bulls. I also believe that the grains have marked their lows (or very near) for the week today. November Soybeans gapped down last night so we were thinking, "oh no" what is this.

This concern was because often times a gap down & go (gap & continue same direction) will mark the high for the week. Instead, beans hit the midpoint gap target (within 1 tick) today - in 1 day.

To figure out the price objective from a gap you measure from the high to the gap, then add that same number at the gap and measure down to the lower price. You should be able to see that the gap is in the middle of the leg with only a glance.

The gap target was 1322.50 and today's low was 1322.75. Also, there are some price swing low points to the left that the bears were searching out.

Check out all of these details on today's November Bean daily chart.

December Corn also gapped down last night, but I don't believe it is a measuring gap. If it was, the gap would project all the way down to the swing lows in the 480 price vicinity and I do not think this is where corn is headed. Further, this gap needs to be filled within a day or 2.

I believe I was about a month off thinking the down move in June was only going to be a correction. I believe this is the correction I was seeing - it is pretty deep at about a 70% retracement.

Furthermore, December Corn marked a V bottom on the 5 minute chart at 11:55 CDT today. A V bottom is described this way - you have a downtrend that accelerates (goes more straight down), spends very little time at the low, then it reverses back up and the funds begin buying.

Depending on the context, a V bottom can often signal a swing low on the larger time frame charts like the 4 hour or daily. One more factor explaining today's selling in corn today is price tagged the July 7th high to the left.

You will see this on the December daily chart, along with the retracement percentage.

Here is the 5 minute corn chart showing today's V bottom and declining wedge pattern.

The best I can tell on September Wheat was that the bears had a lower support line for a target. Here is the updated September Wheat chart.

Overall in the grains, the deeper the corrections are, the more energy they have for a rally - more market participants being stopped out and piling on short.

Crude oil continued it's bull run up today, closing at 81.76 up +1.18. The next target above is about 83.50. Crude price is nearing the top of a sideways channel that it's been trading in since last December.

Some bear swing traders will likely be selling up there, but how low will they be able to push price down? I believe we will soon find out if crude wants to trade up towards 93.5, or if it is going to take some time correcting and/or consolidating.

You will see these areas on today's September Crude daily chart.


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