Tech Guy Weekend Comments 3/19/23
After previously believing the rally in May Soybeans from February 28th to March 6th was an impulse move, I now have concrete evidence that this move up was the A B leg of an A-B-C- correction.
Yes, the upleg in question was a rally, but it was not the start of a larger rally, yet. The most recent down move kept on becoming deeper and deeper and when beans tested the Feb 28th low, I had to re-look at the chart. A clue that I missed was a high volume bar on March 6th, the B high - I wasn't considering an A-B-C which I should have - a lesson to always remain as open minded as possible.
To summarize, May Soybeans was in an up impulse from July 22nd, 2022 to February 22nd, 7 months exactly, then the A-B-C-correction began. You will understand this better while looking at the 4 hour May bean chart, as well as, the daily bean continuation chart.
I had mistakenly thought beans would simply accelerate out of the slight up channel and move higher without much pullback/backfill. While it is possible for a market to do this, the laws of the chart will always take over and the bean chart needed more energy built up before moving substantially higher.
The 4 hour May bean chart will demonstrate that the A-B-C swing measure target of 1470 was hit last Friday. Both the A and C legs are 68 cents in length. Markets/charts like corrective legs that equate with each other.
As it stands now, I am confidant with high probability, that a new impulse will begin this week, with 1584 being the first smaller leg up (filling the liquid continuation gap) with a subsequent correction back to the 1545 level plus or minus 5 cents.
The leg that ended on Feb 22nd is Big1 and Friday completed Big2 - next week begins Big3 which will last for 4.35 months, 7 months or 8.6 months - the .62, 1, or 1.23 Fibonacci ratio of 7 months.
Another clue about Friday being a terminus was the relatively high volume, and the 1-2-3 low + 1 more low. Some traders call this 3 houses and a Hotel - swing low. Check out the 4 hour May Bean chart and the daily continuation charts, in that order.
I have labeled and marked everything I could think of which is pertinent to these charts. The lower up channel line now touches the low prices in October instead of the bodies of those bars. Markets will respond to either way the trendline is set up.
As I stated earlier, May Corn spent very little time below 622.25. The corn continuation expected rough path higher is marked with blue lines also - 695 target initially with a pullback to about 660-659. 622 remains lower support in May Corn.