This report was sent to subscribers on 12/15/09 6:00 p.m. Chicago time to be used for trading on 12/16/09. Everything is done by Howard Tyllas, no program or black box.
After the close on 12/16/09: My resistance was 10.68 1/2, just .01 1/4 from the actual high, and my pivot acted as support and was 10.49, .02 1/2 from the actual low.
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10.78 1/2 10.68 1/2 Resistance -------------10.49 Pivot 10.29 1/2 10.19 Trend 5 day chart.………. Up (from last week same day) Daily chart …….…Down Weekly chart …….. Sideways Monthly chart ….... Sideways $9.71 is the 200 DMA ATR 24 1/4 Overbought 72%
10.68 1/2 Resistance
5 day chart.………. Up (from last week same day)
Daily chart …….…Down
Weekly chart …….. Sideways
Monthly chart ….... Sideways $9.71 is the 200 DMA
ATR 24 1/4 Overbought 72%
"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. Failure at red bracket line and closing lower is bearish near term.
Many reasons this year for the swings in price. Bracket lines are areas that correspond with news events.
In my daily numbers on Tuesday my pivot acted as resistance and was $.04 3/4 from the actual high; my support was $.00 1/2 from the actual low. (Bracket line at
$10.68 1/2 was perfect resistance)
January Soybeans for 12/16/09
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: Spot on soybean numbers in a 19 cent range, with corn stuck in a 5 cent range for the day. I was impressed with the way grains held up in spite of a stronger dollar. As you know I am a bear at these price levels, but until January soybeans (SF) get below $10.19, March corn (CH) below $3.70, and March wheat (WH) below $5, I want to continue to look at it as a trading affair, which means selling it near resistance above $10.60, and buy it near $10.30.
This is what trading is all about, trade management. Approach, structure, strategy, plan, money management, and execution. Since we are discretionary traders, we can use the tools of the technical's, fundamentals, and some intuitiveness in how we trade. Every market is different and has their own nuances, and this the discretionary trader also observes and tries to utilize. All trades are not created equal, as well as time and price. One thing we all have in common, on the day we want to enter or exit, we all need and want to optimize the best price on that given day, and that is where the daily numbers come in. But even if you have a black box, or your own system, my numbers will verify your numbers or give caution if different.
I want to buy the spreads again if they pullback, they should remain firm going into the year end. Farmers are getting cash rich seeing prices at harvest that is historic. This should have them in a position to hold remaining soybeans and to hedge some downside in hopes S. America will have a weather event and send futures and cash basis levels sharply higher. This induces an inverted situation to give reason for them to sell their beans.
PRC purchases both days this week underpins the old crop, bulls will talk about the disappointing soy yields, record November crush figures, and maybe the seasonal of strong soybean prices through Christmas. I will point out bearish supply/demand, my bullish stance on the dollar, Brazil has plenty of idle acreage now and going forward, global feed demand is stagnant for 20 years, Universities and seed companies forecast a jump in yield in a couple of years that is mind boggling. No one can predict events that will truly change the short or long term picture, but this is a futures market and "perception" drives the market to levels that produce opportunities to take advantage of a prediction (by the perception) for something to happen before it does, and get a price that equates to if it did happen before it even does. That is why I a technical trader do not care why a market gets to a price level, I try to exploit that.
No matter bullish or bearish, outside markets will force realities in the grain market in time. Stock market could turn bearish; the dollar bullish, current government looks to change free trade agreements that have boosted farm income for 30 years.
I could quote these thoughts I am gathering for my 2010 outlook, but the bottom line is the FUNDS either do not know world supply/demand for grains, or do not care, they got the money and at the end of the auction they will have been the buyer. They need not be right the fundamentals to drive a market past reality, but the pendulum in time will swing back; I just want to take trades along the way.
I made a few trades buying my shorts back and going long 1 all at $10.51, and sold it back and got short from $1061 to $10.66 1/2. I covered them at $10.58 and tonight at $10.54 and have no position now. I want to sell rallies at resistances, and I would get long lightly near $10.30.
Want to know what I think for tomorrow?
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