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Tech Guy Weekend Comments 8/27/23

The September Eurocurrency has traded down in the last few weeks to a likely support area on the daily chart. This level would then be resistance in the US Dollar. At the very least, it should rally back to the top of the up trending channel that has traded since the start of February.


You will see the notes on the chart about a running correction in an up trend. Instead of correcting lower overall, the market trades slightly higher with each successive leg. Check out the updated Eurocurrency daily chart.


Roger mentioned in his weekly basis report, that the funds are very net short, especially in corn. This got me to thinking about contrary opinion related to market sentiment - how bullish or bearish a market is. When sentiment is very bearish, contrarian traders and funds begin to build a long position.


Trading software programs can quantify market sentiment. This also reminded me of the Kennedy story - when he rode the elevator with a child, and the kid was talking about the stock market.


Based on that exchange, coupled with Kennedy's market expertise, motivated him to liquidate his holdings because he knew the encounter was an indicator of sentiment at that time. Here a link to an informative article about contrary opinion.


Friday was an ID/NR7 daily bar in December Corn. This stands for Inside Day/Narrowest range compared to the last 7 or more bars. The corn daily chart has effectively been trading in a range since August 15th, therefore a bunch of energy has been accumulating to propel a market trend.


Then, Friday's small range puts an exclamation point on that energy build up. What normally occurs after an ID/NR7 day is a breakout. The December Corn has likely bottomed out, so the breakout should be higher.


Take a look at the continuation (Dec contract) corn chart. Pleas notice my notes on the chart. Support should be very close to Friday's close of 487.


On Friday, November Soybeans broke up and above last Monday's high. Beans have also completed the business of closing the gap from 7/31-8/1 which is to the left on the chart.


The next order of business will be a test of the swing high to the left of 1435. You will see this information on the daily bean continuation chart below. Support should be 1379.


Below is a map of how much precipitation fell as a percentage of average over the last 2 weeks in the US and corn belt. The large swath of red color in the middle encompasses southern SD, most of NE & IA, and runs into a portion of Illinois.


The red splotch at the top of the map covers a lot of the crop growing area in northern MN. Here is the NOAA link so you can examine the map.



The lack of rain over the last 2 weeks and high temperatures of last week are not very conducive for grain and pod fill. Then we have the 6-10 and 8-14 day NOAA weather forecast of not much rain and higher temperatures creeping back in.


These data points added together equals a lower quantity of crop than average. Here are the forecast links.





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