This report was sent to subscribers on 12/8/09 6:00 p.m. Chicago time to be used for trading on 12/9/09. Everything is done by Howard Tyllas, no program or black box.
After the close on 12/9/09: My resistance was 10.56 1/2, .05 from the actual high, and my support was 10.21, .00 1/2 from the actual low.
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10.64 1/2 Resistance 10.56 1/2 -------------10.43 3/4 Pivot 10.31 10.21 Trend 5 day chart.……….Down(from last week same day) Daily chart …….…Down Weekly chart …….. Sideways Monthly chart ….... Sideways $9.65 1/2 is 200 DMA ATR 24 1/2 Balanced 40%
I continue to say "Since downtrend line was hurdled the bulls hit their target of $10.68 but failed and created a "double top", then the pullback, then the extension to the next and more significant "double top" and failed a second time. As I said before "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. Uptrend line is pivotal at $10.42 3/4 now".
10.64 1/2 Resistance
-------------10.43 3/4 Pivot
5 day chart.……….Down(from last week same day)
Daily chart …….…Down
Weekly chart …….. Sideways
Monthly chart ….... Sideways $9.65 1/2 is 200 DMA
ATR 24 1/2 Balanced 40%
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.
In my daily numbers on Tuesday my resistance was the $.00 3/4 from the actual high; my pivot acted as support and was $.05 1/4 from the actual low.
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 corn numbers, as well as spot on resistance and helpful support in soybeans.
Corn is still extremely oversold technically even though they were firm on Tuesday. Crude oil corrected 12% coming $10 off their highs, gold retracing the $100 (I was looking for) or 8% from their high, maybe stemming from the dollar showing bottoming action on the chart. This is not helpful for the bulls. I will admit that soybeans seem to defy gravity, and I can make a case for the bulls but not at this price level. To me, the fact that the SF/SH is 8 cents tells me that the high price has produced the farmer selling to fill the pipeline and thus so the basis has weakened. Corn has been in a carry charge for this entire year, with only brief times the spread would narrow a few cents. This could induce more farmers selling of soybeans next year, and get the carry for corn.
Trade is taking off 50 million bushels of corn exports on the report Thursday and adding 40 million bushels of usage for soybeans. This is not the final report and even then (January 2010) it is already expected to be updated once or twice thereafter because of this historic late harvest. I am thinking that the export sales report that comes out every Thursday could be as important this week as the USDA supply/demand report.
I covered my shorts at $10.48, and still have my spreads that I want to take into the report. I spun my wheels making a little more on my swing trade than what I lost on my spreads Tuesday. Outside markets are no longer helpful to the bulls, the fundamentals I perceive as bearish, corn chart is breaking down, but soybeans are holding up. Both these markets are hard to hold no matter bull or bear positions, and day or swing trading at locations with a bearish bias is how I continue to want to approach trading the grains at this time. I want to continue to sell rallies at resistance. Funds look like they are defending their soybean "bet" and they have the money to be in control, but when the day comes to unload ownership, you will see quick movement to a bracket line support area.
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