Tech Guy Weekend Comments 11/5/22
The US Dollar had a frenzied selloff on Friday down 2.030 to 110.774. This liquidation event is the largest down day in the Dollar in more than 7 months and it adds to the odds that a major top is forming.
The swing high the Dollar sold from on Thursday is the 3rd lower high since the monthly high on Sep 28th from the price of 114.105. The next possible support is the 109 level - if the Dollar does not reverse back up too much from 109, and forms a 4th lower high, all US assets will benefit and the probability that a significant top is being formed on the weekly chart will increase.
There is a downtrend line in Jan Beans which is currently providing overhead resistance. For that reason and another - namely that the chart has a familiar short term sell signal from Friday, I am expecting a correction lower.
I anticipate a selloff down to the 1428-1423 area in the Mon/Tues timeframe, then a slingshot back up to make new highs for the move, maybe after the report Wednesday. I expect a near-term run up to 1510. You can see the red sell line and green buy line on the updated Jan Bean chart below:
I don't expect much movement from Dec Corn or Wheat before Wednesday's USDA Production estimate. Perhaps the report news will be the spark to get them releasing energy to the upside.
The 3715 area should remain good support in the Dec S&P market, We are going to see if it rallies straight up from here or needs to mark another leg down after a small bump up. 3840 level is resistance for now. Below is a blowup of the correction going on in the S&P:
Dec Cotton will pull back in the next 1-3 days, either from Friday's high of 87.87 down to 77 (near the top of the break-away gap), or from a price above 90 back down to the 80 level.
Dec Crude Oil almost made it to 94 on Friday trading all the way to 92.87. I don't think we get a big reversal down from 94, just a pause. Next, I am looking for 98, the neckline of the big upside down Head & shoulders. Check out the Crude Oil pattern on the chart: