Dec Wheat - 1 to 2 Lower
Dec Corn - Steady to 1 Lower
Nov Beans - 5 to 7 Lower
Remember I have been talking about the macros shifting from risk-off back to risk-on environment? It's a process that take several days or even weeks - like turning a big ship. Today was a powerful nod and exclamation point in the risk back on department.
I do not know that today is the exact low in the Dec S&P for certain but the enormous volume (highest since Jan 23) says it is. We keep watching and every day we get more data to go on. There will be stopping volume (selling that stops a rally) above last weeks high - will it stop it temporarily or for an extended period of time?
The Dec S&P futures had a fake out selloff down then reversed emphatically on historic volume to the upside on tremendous fund buying volume to close up almost 100 points - This was the biggest volume of the last 9 months. The bulls came out of the woodwork. The DOW futures closed up about +800 points and had a 1500 point range on the day.
The way this works is the last of the weak longs are getting stopped out on the 7:30AM CDT CPI data and new, weaker selling is happening as well. Then when the pit opened an hour later, the whales (strong fund buyers) knew that the open was the deal of a century and squeezed the new shorts out of the market. Here is the S&P chart - notice how the volume bar at the bottom is much bigger than all other bars - red arrows.
Notice how the volume today completely dwarfs the volume even from 2 weeks ago when we were getting the wide swings up and down.
Also, the US Dollar reversed (key reversal) down (.971) in a big way and Nov Crude was up almost 2 bucks. I am betting that this is the beginning of a new risk on trend which should last for months - including grains and most commodities.
Dec Corn last traded near 697.75, up +4.75 - support is 682 and resistance is 700-706. Not much is different on the chart, but here is an update - staying in the upsloping channel - energy is building.
Dec Wheat had a fairly wild swing on the CPI data as well - selling off to 863 (above the neckline - 855) then rallying to 906.25 and last trading at 891, up +8.75 on the day.
Nov Beans ended up with a small loss today (down 2.00)
The overall market reaction was capitulation then very strong buying. This tells me that maybe the markets feel that the inflation numbers have also capitulated (peaked). Something to keep our eye on.
Nov Crude Oil Update: rallied from 86 support to 90+ today. I expect selling down to about 87 then a rally to 91, then selling back down below today's low at 85.56. I realize this is a lot of bumps, but I like to visualize the future when a market gets wound up like crude. The moves are drawn out on the chart for you to see. However, you have to allow 1 leg at a time to mark - with each successive leg we become more confident in the projection.