Dec Wheat - Steady to 1 Lower
Dec Corn - 1 to 2 Lower
Nov Beans - Steady
The 841 gap area did not hold in the Dec Wheat. It needed more backfilling to recharge the bull energy. This chart is forming a more balanced looking upside down Head & Shoulders, with today's trade looking like the right shoulder forming.
Today's support comes from the August high at 820.75 - red horizontal line on the 4 hour Dec Wheat chart. The 5 min chart also gave me a heads up when the second 5 minutes of trade produced more volume than the 1st 5 min bar.
Anytime peak volume happens outside the open, and on or near a swing low or high, it's a good bet the area is capitulation - in this case the last of the sellers giving up while the stronger longs (funds) scoop up the weaker shorts.
To refresh, The first 5 minute bar usually has the most volume for the day - 95% of the time. Therefore, it is a reliable tell when the peak volume occurs later in the morning. The right shoulder support is between 828-809.
Please study the 4 hour and 5 minute Dec Wheat charts (2) - in that order - showing the H&S forming, the red horizontal line across the August 8th high, today's low, and the 2nd 5 minute price and volume bar (bottom of chart).
Support for Dec Corn comes in at 667 and 659. Resistance is 704, 734 and 749. Remember the break away gap on August 23rd at 631.25 produced very heavy (record) volume on the 8:30 CDT pit session open - the first 4 hour bar. This bar produced even more volume than the USDA report last Monday.
It was this record (fund buying) volume combined with the fact that trade could not fill this gap as the days ticked by, and the higher highs and lows that determined it to be a break-a-way gap. By definition this type of gap is the start of a vigorous up move.
Nov Soybean support comes in at 1434 and 1427. Resistance is 1509, 1536 (gap), and the swing highs between 1557 and 1585. It's breakaway gap is down at 1358 - over 100 cents down.
Oct Heating Oil (Diesel) Update. I thought a right shoulder (higher high) was forming the last time I commented on Diesel. That was dead wrong. Instead it sold off to 3.1300 from 3.700 area - testing the lower head area. It has effectively made a double bottom at the 3.1300 level over the last few days .
3.1000 - 3.2000 is strong weekly support (strong floor) - these prices are the highs made between 2011 - 2014. Diesel will most likely work higher from here, towards 3.800, then back off to 3.4500 - covering the next 2 or 3 weeks.
On the flipside if the energy markets completely fall apart, we could see 2.7000 - 2.8500.
Oct Crude Oil Update: Overnight trade had prices sell off to nearly test the 81.20 lows, marking a double bottom - from there prices rebounded swiftly back to 85.20 - it looks like a V bottom - straight down and straight back up. Next, I expect the neckline to be tested in the 90 area.