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Tech Guy Weekend Update 7/30/23

My timing was off regarding the December Corn correction last week - didn't think it would last so long. Patience and timing of corrections is usually the most difficult aspect of chart analysis for me.


As it turns out, corn needed to test the July 21st low, 6 bars to the left, and the July 17th high also to the left. However, as you know from the chart, price ran straight down at the end of June and because this correction took some time, more energy has been able to build. Therefore, once the next upleg begins, it should be relatively unimpeded.


We will see how tonight opens, but I expect the 531 close on Friday to be good buying support for the next up leg. Also noteworthy, is the impulse higher was 8 days in duration and the correction has been 4 days.


Corrective moves are often in the 38% to 50 or 62% range as far as time goes. Check out the current December Corn daily chart noting the dates of the bars listed above.


It is interesting that September Wheat also tested and found support at the July 17th high, on it's chart. This is evidence that corn and wheat's DNA is similar and that they're trading in sync with each other.


Therefore any bullish wartime news that affects wheat will also affect corn, but to a lessor degree. Here is Friday's daily wheat chart.


September Soybeans marked an upside gap last Sunday night and the corrective selloff last Thursday and Friday closed that gap. I still feel like beans are going to eventually mark up another bullish leg.


However, this gap, without considering any other data, is in a location where an exhaustion gap could be. We will have to see how the next couple of days trade. If price gets below the gap closed line on the chart and stays below it for 2 to 3 days, this will be a warning for the bulls that a longer correction could be looming.


I found a horizontal line running across many highs and lows to the left, from Friday's low, on the November Bean chart which should be supportive.


Friday's trade in the November contract also seemed to find buying support after testing the July 21st low. The September bean chart is first, followed by November - note the red line running across Friday's low and to the left on the November chart.



August Live Cattle update:


This chart has been forming a descending triangle the last 5 days - price has been flat to downsloping after the high was marked on July 20th. Then, after selling down below the inclining wedge early last week, cattle has made no attempt to re-rest that line with any buying.


This suggests weakness, and is more evidence that August cattle has marked a swing high that will stick for a while. Will it be days to weeks, or weeks to months? All we know currently is that cattle is in a downtrend which is gaining momentum and further selling is likely.


Here is the updated August Live Cattle daily chart.


2 Comments


How can you be that far off? Dec $5.31 will hold ? It got hammered who knows how much lower yet??

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Tech Guy
Tech Guy
Jul 31, 2023
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I'm human.

2nd wave down corrections after a rally has begun can be very deep. I think today was likely a 1 day event. Please read today's report coming out in about 30-45 minutes.

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