Pro Farmer Senior Market Analyst Rich Posson says November soybean futures confirmed a level 1 top and a level 2 bottom is due during August. "Both of these types of trends of demand occur two to three times per year with Level 2 as a component of Level 1. The five-week stochastic made a sell signal last week and it has rolled over with wide enough spread to consider chance for lingering bearish momentum," says Posson.
Posson says there is downside potential for November soybean futures between to $9.60 to $9.20. "Open interest increased little during the late phase of the recent rally, suggesting many a trader was on the sidelines," he adds.
On the November soybean chart below, Posson uses technical indicators such as stochastic, moving averages, trendlines as well as his business-cycle analysis:
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