Soybean and Wheat Charts
January 26, 2021 Soybean and Wheat Charts
As a practitioner of Technical Analysis, I am fascinated with the effectiveness of Fibonacci Retracements levels to act as levels of support and resistance.
The most common Fibonacci Retracement levels are the .236, .382, .50, .618 and .650 levels. Whenever price is approaching these levels, I prepare for a reaction, maybe a reversal, maybe price slows down and consolidates.
The Golden Ratio of .618 or 1.618 is of particular importance to traders and is commonplace for a bounce or reversal.
The area between the .618 and .650 level is known as the Golden Pocket. Price often finds buyers in this Golden Pocket.
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Soybean Futures
Let’s take a look at the monthly ZS1! Soybean Futures (Continuous: Current Contract In Front) chart below:
The chart above has the January month candle hitting the .65 level…..to the tick.
Why is that?
Did the fundamentals change at that price level?
OR
Does that Fibonacci level become self-fulfilling with the number of eyes and Algos paying attention to it?
I suspect the latter.
There is an endless number of tools that a Technical Analysis can apply to their decision-making process whether you are a Day Trader, Swing Trader, Investor, Producer or End-user.
As time goes on, I am simplifying my charts with fewer indicators and oscillators and preferring to use the ones that are sentiment-driven or have the most “eyes” on them.
Currently, trendlines, Fibonacci Retracement and the Volume-Weighted Average Price are what I am relying on.
Less information and noise have improved my decision-making and trading.
I think it will help you too.
Wheat Futures
Wheat keeps moving higher along with most commodities.
By most accounts, a commodity boom has started.
Below I have a weekly chart of the ZW1! Wheat Futures (Continous Contract: Current Month in Front).
I began discussing a potential breakout above this ascending triangle in the April 2020 issues of the Klarenbach Report.
October brought a breakout and a successful retest of the top line of the ascending triangle.
Once that happened, I became confident that our minimum price target identified by the green horizontal line will be reached.
Keep in mind that this is a minimum target and I expect a slowdown in this area.
When will it get there?
I have no idea.
Life is Good
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