January Soybeans Daily Numbers & Trade Ideas for 11/24/09

Published on: 13:45PM Nov 24, 2009

This report was sent to subscribers on 11/23/09 6:00 p.m. Chicago time to be used for trading on 11/24/09. Everything is done by Howard Tyllas, no program or black box.

January Soybeans

After the close on 11/24/09: My pivot acted as resistance and was 10.50, just .00 3/4 from the actual high, and my support was 10.32, the EXACT actual low. These are the same numbers I use in trading an actual $1 million account.

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10.80                                Resistance                            


-------------10.50               Pivot  


10.11 3/4                          

      Use the same numbers as used on 11/23/09


5 day chart.……….. Up   (from last week same day)                                                 

Daily chart   …….…Down              

Weekly chart …….. Sideways      

Monthly chart ….... Sideways $9.57 is the 200 DMA

 ATR 27                    Overbought 76%

Red bracket line near $10.50 is pivotal; downtrend line is now support near $10.12. Since downtrend line was hurdled the bulls hit their target of $10.68 but failed and created a "double top". I consider this a key reversal, but lately the funds have come back to negate this signal, so I consider the action bearish but not as strong as usual.

    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 Monday my resistance was $.01 1/4 from the actual high; my support was $.06 from the actual low.

     January Soybeans for 11/24/09

More chart comments: After you have seen this type of rejection at a high ($10.68) after rallying $1.14 in less than 2 weeks (almost a 10% gain) you will get the confidence that I have had for decades in taking trades at this type of location. When you look at the times it works versus the times you will get stopped out, and the amount gained when right versus the amount lost when wrong (does not hold) you see how I look at this trade as me being the casino getting the odds versus the player who gives up the odds.

   Patience to wait for good locations to enter a trade will reward you by providing minimum loss if wrong, and more profit if right. You might miss trades (some glad you did) and not be as active, but this type of trading makes you a casino, not a player. These locations are also valuable to the day trader that can use (in this case) the red bracket line (or the high of $10.68) to be a seller and have a stronger resistance backing you, hence easier to sell than when in the middle of bracket support and resistance lines.

New subscribers should take note of what I have been trying to instill in your mind, fundamentals go only so far in trading since 2003 and the funds dominance, fundamentals do little in the way of price discovery, and technical levels, lines, and gaps on the chart present opportunities no matter the reason it got there. I do not take credit for your success or failure; I only take credit for providing you the best numbers I believe that are second to none. YOU are the trader, everyone with different tolerances for pain, timeframes, account size, approaches, money management, and that are the reasons I do not tell you what to do, I only tell you what I am doing or would do if I were to trade that market. That is why YOU take the credit if you are trading well and following your plan, executing when and what you are suppose to do, and you are also the one to recognize if you are not and must take control or make adjustments. I have no problem when I take trades that lose money, but I never let the loss get out of control and try to keep the amount insignificant. Yes, as you know I have had days when I made or lost $10,000 this year, but you also knew I had 50 spreads on. I did not lose that on a trade I originally allowed to lose $1,000. "All trades are not created equal" I have said many times, and contract size is one way to control money management.

Keep a daily journal and talk to yourself that way, and if you read a week or two later that you are doing something now that you said you would not do again, then you are self destructive, feel you are not worthy to succeed by doing the right things, and must take control of yourself. Do that and you have a much better chance to improve your trading and show some better results. If you are doing things right you can reinforce why you should continue to do that, including keeping track of what you are doing intuitively. As long as your intuitiveness is working, tell what and why you did that, and when your intuitiveness is not working, it will allow you to stop. Otherwise you will keep it real and know EXACTLY what it cost or gained.

Trading really does not take that much brains, it takes discipline, patience, execution of your plan, and the proper strategy (approach, and timeframe) based upon your personal mindset.

Grains: Corn harvested advanced more than I thought at 14% but that still leaves 3.4 billion bushels above ground instead of in the bin. IL, MI, WI, and the Dakota's having the worst delays showing less than 60% harvested. Red ink in the livestock sector, poor exports, and I read continued reports from farmers with smiles on their faces while they look at their yields should more than offset the delayed crop, but with the chart not only holding the uptrend line at $3.80, it looks like the 200 day at $3.85 1/2 is hanging on for now. With that being said, I think it is the funds that are holding up the market, not the fundamentals.

The dollar comes into play because many funds are playing chess and the dollar is what they are using in planning their next 6 moves. If you play chess or any strategy game, you have a plan but when your opponent (in trading it is the market) makes a move that you were not counting on, you change your next 6 moves. (If you are an chess expert, or at least have played for many years, you can have a plan from the first move until the end of game.)

It is not a day to day thing with the dollar, but it is where it might go, and before I strongly sell grains I want to see the dollar index get above 76130 (today close was 75185) and start to break the 8 month downtrend. Until then the funds premise still has merit and I do not want to fight city hall, at least not for more than a contra trade. What will the money flow be in December into and from the funds? I do not know, and this year I would flip a coin and give the bias to the funds getting more capital inflow. Last year was easy, they were all closing, at least more than a thousand. Commodity fund rebalancing has been in play for awhile with the "big boys" spreading rumors promising sizeable buying in corn and wheat. Maybe it is already baked or 1/2 baked into the pie already?

Soybeans enjoy the fact of the tightest of the 3 in stocks, and amazing export business. Unless soybeans close below $10.31, this market looks well supported. The "double top" at $10.68 is strong resistance for now. Again in a market I wanted to day trade for now I took home 5 shorts over the weekend. I had the chance to buy on the open Sunday night but waited for the market to get above the pivot covering 3, but reselling at $10.60 and adding 3 more at $10.65, stops were just above my resistance of $10.68, I like using a stop $.02 1/2 above resistance for now. I covered the best at $10.39 1/2. I have 2 SX/SF spreads on and I sold 1 at $10.47 1/2 tonight against my pivot, and will use a $10.51 1/2 buy stop to protect if it does not work. I want to day trade and will buy back at $10.37 1/2 to $10.39 tonight ($10.36 low so far tonight).


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           May Your Next Trade Be The Best                          

                     Howard Tyllas            

   Tel.1-312-573-2699, 1-312-961-4390

Disclaimer:     No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures trading involve risk. In no event should the content of this be construed as an express or implied promise, guarantee or implication by or from Howard Tyllas, that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are no indication of future performance.