This report was sent to subscribers on 11/17/09 4:40 p.m. Chicago time to be used for trading on 11/18/09. Everything is done by Howard Tyllas, no program or black box.
After the close on 11/18/09: My resistance was 10.53 1/4, .04 1/4 from the actual high, and my support was 10.11 3/4, .11 3/4 from the actual low.
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10.53 1/4 Resistance
-------------10.32 1/2 Pivot
5 day chart.……….. Up
Daily chart …….…Down
Weekly chart …….. Sideways
Monthly chart ….... Sideways $9.55 is the 200 DMA
ATR 27 1/4 Extremely Overbought 97%
January Soybeans Chart
Red bracket line near $10.45 is resistance; downtrend line is now support near $10.12.
Downtrend line was hurdled and bulls now target red bracket line.
January Soybeans for 11/18/09
Many reasons this year for the swings in price. Bottom line: Bracket lines are areas that correspond with news events. Green are when crops look good, red when the crops do not, or are delayed, aided by demand.
I have always said, "I do not care what the reason the market gets to a location on my chart that presents a trade opportunity".
In my daily numbers on Tuesday my resistance was $.00 3/4 from the actual high; my support was $.02 from the actual low.
Grains: It is like I have seen this movie before, I said yesterday the story goes like this "I think we will at least jab above the fall highs in corn only about $.10 away, and soybeans $.20, to get buy stops and see if it attracts more buying, and see if sellers reappear. I believe we are not going too much higher from there," Corn acted like it was not in the movie so going $.10 higher was not in the picture, but soybeans jabbing above their autumn high by a few cents and allowed for in my chart resistance numbers was, and the slight pullback tonight confirms the trade. I sold at the $10.17 mark on Tuesday, took out a few cents on a couple and got stopped out on 3 at $10.23. I sold again near the close at $10.30 and bought the November back at $10.26 tonight to cover the last of my bull spread (SF/SX). I sold them at +4 on the Jan, and some I bought -9.
Looks like another night of us little guys evening up their positions with no sign of fund activity. This market is really strong with all things being considered. The funds are in there buying and they are like a freight train coming down the track, but like last year they do derail and crash, and then they are taken out of service, forever. But this train has been rolling and I think it has enough steam that it wants to go a little higher. If January soybeans can close above $10.32 I think they can go $.50 higher. The funds allocate money in commodities, and when they look around at the price of gold they must think grains are cheap relative to other sectors.
Yes, we have rallied to our autumn highs, but consider 2008. Relative to fall 2008 capitulation lows, the soybean market has rallied $2.53, corn $1.12 and wheat $1.19. Relative to 2008 highs however, the wheat market is off $5.00, soybeans are off $6.29 and corn is off $3.63. Fund managers who think that 2010 wheat global acreage is going to make 2010/2011 stocks tight is probably the main fundamental reason behind the unbelievable buying. With this price it is hard to believe wheat producers will not plant pillar to post and hedge it. Wheat does not have a good outlook fundamentally going forward, and selling wheat buying corn risking $.20 makes sense if I wanted to trade wheat (I do not) especially if I wanted to sell wheat (which I would). One of the main reasons I have not traded wheat for years is the fact the options are not really liquid, compared to the volume in corn and bean options it is almost nonexistent.
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