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Tech Guy Weekend Comments 1/14/23

March Corn and Soybeans finished the week strong, with up days both Thursday and Friday. Open interest increased over 10,000 contracts in soybeans both of those days and it increased 10,000 & 6000 respectively in corn.

The open interest data indicates new fund buying coming into these markets as they digested the USDA information. This is flat out bullish for both corn and soybeans because this is new fund money or additional building of long positions making a bet that prices will continue to trend higher.

Additionally, March Beans closed exactly on the top of the old June gap to the left. This fact also indicates strength. Look at it this way - gaps are often times levels where a market makes a reversal.

If beans were going to reverse course down it most likely wouldn't challenge this gap again. Instead, March Beans would retrace up 62% or 78% then head back down. Take your time looking at the daily March Soybean chart. Look to the left where the gap sits and also, there is a red arrow pointing to Friday's close.

March Corn's next price objective is the uptrend line from 2020 at 705, then later the big gap on the corn continuation chart at 730. Check it out.

March Chicago Wheat put in a Doji on last weeks weekly chart. Because of where the Doji is in relation to the rest of the chart (very near a previous low), this fact is more evidence that a rally is beginning.

I overheard another technical analyst say that Thursday's bar was a key reversal day because it marked a lower low than Wednesday then closed above it. I have placed a red arrow on the daily chart where this phenomena occurred - it is the 2nd and 3rd bar from the right. A Key reversal up is bullish.

The first chart is a blowup of the weekly wheat and the 2nd on is a blowup of the daily March Wheat chart highlighting the last few days of trade. Notice the Doji on last weeks bar where the open and close are near each other.

Here is the daily chart highlighting the key reversal in March Wheat and 2nd close in-a-row above the bottom of the broadening pattern. What this reversal bar is saying - lower prices were attempted but they were met with furious fund buying - the lower price was vehemently rejected which translates into strength.

The price targets for March Wheat are 760, then 799 in the nearterm.

On Thursday and Friday, Feb Crude Oil pushed up through more resistance as it traded higher towards the neckline. The next task will be to see if crude can break through the neckline and work up towards the targets of 88, then 93.5. You will see what I'm talking about on the updated 4 hour chart. here.


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