Tech Guy Opening Calls & Comments for 10/19/22
Dec Wheat - 1 to 2 Higher
Dec Corn - 2 Higher
Nov Beans - Steady
Today is a lesson in Elliot Wave theory and what's going on in the Dec S&P (Crude Oil below). I know I said that the 3rd leg is usually the longest leg. However, sometimes at the beginning of a trend the first leg is a leading diagonal - where 1-3-5 become successively shorter - this appears to be happening in the S&P.
And this kind of makes common sense because when a new trend is starting there are still a lot of crosscurrents (buying and selling) - the bulls have taken over but some of the bears (big money) remain entrenched, fighting. With each leg (1-3-5) that moves up, the bears pile on with more force in hopes of taking control again, and causing each successive up leg to be shorter.
The 1st up leg (1) was 232 points. Number 3 was 186 points so the 5 wave might be around 150 points and terminate at the old high -left (H) on the chart.
To summarize, the backbone of Elliot Wave is 1-2-3-4-5 (big 1)-A-B-C (big 2) - then big 3 begins with a smaller 1-2-3-4-5 within the big 3 just as we are now marking 1-2-3-4-5 within big 1 on the Dec S&P. There are always smaller waves within bigger ones, similar to the concept of different time frame charts, eg. 30 min,1 hour, 4 hour, daily, weekly, monthly. I hope this makes at least some sense. If you will spend some time studying the labeling on the chart I believe you will begin to see it.
As anticipated, Dec Corn traded between 685 and 674 today - it will take some kind of force (news) or weather to cause corn to breakout probably to the upside with the seasonal trend.
I had mentioned earlier that Nov Beans should have an expanded week this or next week. Today it pushed the support boundary down to 1357. With November options expiring, beans will stay rangebound tomorrow and Friday between 1365 and 1413, then perhaps expand next week.
Dec Wheat traded above the 855 area overnight and this morning only to be slammed back down to test yesterday's low (832.75). Only it didn't quite get there and the funds bought it at 835.25 and above. The funds will continue to buy below 855 until there are no more strong sellers and Dec Wheat can begin working its way back up towards 900 and above.
Yesterday's right shoulder (81.20) held in Dec Crude Oil today and price worked up to 84.77. The next target is the neckline above, around 95. The legs are numbered with more detail of Elliot wave counting so we can continue the theme. Elliot Wave is the most basic way to label charts and other patterns like Head & Shoulders or double top (M) can exist along side the counting.
Spend some time thinking about the Elliot structure and studying the charts and how they are labeled and you will see it.