Tech Guy Weekend Comments 1//29/23
March Chicago Wheat painted an inside bar/day, narrowest range (ID/NR7) of the last 7 days on Friday. The range was only 9 cents, whereas the range on Wednesday was about 12 cents. All the other 7 days marked a 15 cent range or better.
In case you don't remember what this means, let me explain. This setup is an energy building day in the context of an upleg that we believe is going to continue higher. Therefore, the expectation is range expansion days up on Monday or Tuesday or both days.
The next target higher is 770 and support is 742. I have zoomed in to the wheat daily chart so you can the relevant detail.
March KC (hard) wheat exhibited a bullish weekly bar. It is called a outside/close higher than the previous weeks high. The bears tried to take prices down below last weeks lows, but the bulls would have none of that and bought prices up to new highs for the week - displaying for the trade who has control. The setup points to higher prices also. This is what it looks like.
As expected, March Soybeans closed the gap last week, confirming an exhaustion gap down meaning a rally is imminent. Friday's trade tested Tuesday's high (marked with red arrow).
What you now want to see, expecting that beans are headed higher, is for this old swing high to contain prices and I believe it will on Monday or Tuesday. Interestingly this same price is very close to the 1508 high which is the top of the ascending triangle. It is a positive setup going into next week's trade.
Here is the March Bean contract 4 hour chart showing the support (red arrow) at 1506.5 and the 2nd chart is the daily, wider angle chart depicting the close for the day and week atop the triangle. Next resistance is 1536, then 1549.
After falling through the balance line last week, and finding a higher low, March continuation Soymeal reversed back up to close above this line - a bullish development. Check out Friday's updated chart.
After testing the top of the sideways range a couple of weeks ago, the March S&P chart continued up towards the 2nd target last week, confirming the bullishness of equities, despite what the doomsayer analysts are saying.
With every passing week that the stocks cannot selloff to new lows, brings more confidence that a new upleg is in the works on the daily and weekly chart and that the "bear" market is over for this cycle. Here is the updated 2 hour S&P from Friday.
After getting stopped out of the Natural gas, trying to pick a bottom, last week presented a higher probability long entry. This is a good example that the trend is your friend and the fact that a human think price should turn around means nothing.
March Nat Gas continued selling off below 3.00 and below the lower middle range line on the weekly chart, then Friday marked a perfect, almost butterfly Doji which is bullish. Once price begins marking up, 4.50-5.00 (red arrows) is a reasonable retracement level. You will have to zoom in to see Friday's bar. Shout out thanks to Mark for reminding me about this chart.
I expect March Crude Oil to hold near the 79 level, and March Corn to rally up to test the 692 level early this week, just above the neckline. Please refer to these charts from Friday's report.