Tech Guy Weekend Comments for 7/23/22
Since January I have identified a regular interval (35-38 days) in which corn and soybeans mark a swing high or low. What that means is the low or high was significant - it lasted for several days or weeks.
This 35-38 day cycle is calendar days and translates to about 26-28 trading days. Furthermore, the cycle has been working for soybeans and corn. The corn swing point (high or low) is always within 2-3 days of the soybean swing point - they are not always on the exact same day but sometimes they have been.
The last turn came on June 17th when the big selloff began from the high of 749.25 in December corn. The turn before that occurred on May 9th, which was a low point. Before that, near April 1st marked the previous swing low point. Friday marked 35 days from the June 17th high for both Dec corn and Nov soybeans.
Nov Soybeans marked somewhat of a doji day on Friday - the open and close was near the middle of the range (could be the low already), whereas Dec corn closed on the low, which was a new low for the move.
Based on this pattern, both corn and soybeans should be marking a final low for this move - within a trading day or 2 from Friday.
The only other noteworthy pattern or trend change occurring is open interest delta - the number of open contracts added or subtracted from the total trades open. Since June 17th until Tuesday July 19th the open interest declined every day - traders were closing positions/liquidating. On Wed, Thurs and Friday of last week, traders added positions - open interest went up.
Open interest is called an underlying fundamental that tells us about fund money flow. I have noticed in prior years this change (adding contracts after a protracted liquidation) sometimes indicates an upcoming trend change in corn and soybeans.
Because this 35-38 day cycle has been so reliable, we have to assume that it remains to be reliable until proven otherwise.