This report was sent to subscribers on 12/14/09 6:00 p.m. Chicago time to be used for trading on 12/15/09. Everything is done by Howard Tyllas, no program or black box.
After the close on 12/15/09: My pivot acted as resistance and was 10.63 3/4, .04 3/4 from the actual high, and my support and was 10.49, just .00 1/2 from the actual low.
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11.05 2009 High 10.78 1/2 Resistance -------------10.63 3/4 Pivot 10.49 10.31 Trend 5 day chart.………. Up (from last week same day) Daily chart …….…Down Weekly chart …….. Sideways Monthly chart ….... Sideways $9.69 1/2 is 200 DMA ATR 25 Overbought 79%
11.05 2009 High
10.78 1/2 Resistance
-------------10.63 3/4 Pivot
5 day chart.………. Up (from last week same day)
Daily chart …….…Down
Weekly chart …….. Sideways
Monthly chart ….... Sideways $9.69 1/2 is 200 DMA
ATR 25 Overbought 79%
"Double top" is once again resistance. This is the main reason technically for playing the sell side against these tops. Uptrend line remains key support.
Many reasons this year for the swings in price.
Bracket lines are areas that correspond with news events.
In my daily numbers on Monday my resistance was $.04 3/4 from the actual high; my support was $.04 1/2 from the actual low.
January Soybeans for 12/15/09
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 or $10.80) 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.
Grains: Accurate numbers. You know the story in here. So what will the funds do? I do not know what they will do, but what I do know is that I will continue to day trade using the numbers. I have said this for awhile, and also said that it is worth a small position to trade at support and resistance bracket lines, and take profits somewhere along the way. Many times we have rotated up and down between $10.60 and $10.30, and the extremes have traded briefly above and below there, but within the parameters I have laid out in the past on 12/2/09 when I said "Soybeans $10.80 is going to be a hard wall to breakdown, then the bulls are facing the high in the summer when the perception that the crop was floating away and posted $11.05. As long as $10.12 holds I think we will be range bound $11.05 to $10.12. Corn has looked weak lately, and the thoughts I have had about this market are surprising to see this market at this level at this time". (more comments like this on 12/1/09 & 11/30/09)
I bought back my short corn last night (Sunday) at $4.01, and even got long 1 at $4.00 1/2 before selling it back at $4.03 1/2 before calling it a night. I also covered my short soybeans at $10.27 so I would have no position going into open outcry on Monday. Selling again at $10.39 in open outcry soon proved to be not a good idea and covered some for a few cents loss, but the others I am still short. What saved me from that loss was my bull spreads worked well making 3 cents from Friday's close, and I covered all for now. I am not telling anyone to give up on their bull spreads of SF/SH from -8 cents (went to -9 cents, now -6 1/4) and the spread I had SF/SK from -17 cents (now 10 cents making 7 cents).
The market looks so strong, but remember it has looked strong every time before it failed. This short trade like the previous sells at this resistance that worked, has a protective buy stop and risking less than I am willing to make. As long as it works more times than not I will take the trade. Sometimes I might sell only 1, and sometimes 5 or more, but I always keep it reasonable and insignificant no matter right or wrong. Futures traders really don't have much hard news around them but do have plenty of small talk and rumors that Managed Money and Index Funds will be allocating a lot of new money to the grain markets at the turn of the year.
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