On April 5th, July Soybeans posted aÂ low close of $945 1/4 inside the 60% buy window. Two days later,Â Soybeans rallied out of the buy window and traded through the trigger price for a long entry signal. The reverse/forward count projected a new upward price swing ofÂ twelve days from the low closeÂ from April 5th.Â I also used theÂ count to project a targetÂ objective at the down-slopingÂ reaction (red)Â line. After the buy signal was triggered, July Soybeans rallied over 60 cents into the April 21st reversal date and touched the down sloping reaction line -Â at $10.17 â€“ on the followingÂ (trail) day. Soybeans reversed at the reaction line and are currently trading sharply lower. By understanding how to use the â€œaction-reactionâ€ price behavior IÂ could have Â identified the target objectives two weeks in advance. To learn more about this trading technique read â€œUnlocking Wealth, Secret to Market Timingâ€.
Soybeans touched the ascending median line objective on March 22. The market stopped at the median line and posted two consecutive lower closes as it pulled back to the 20-day SMA. This is a possible bullish TR pattern forming inside the prior market swing. A trade above $9.76 1/2 would confirm the pattern and trigger a price move towards the reaction line.Â It is not time to make a move on this market, but it is a good market to put on your radar.
The recent two-day rally came to an end after trading above the prior dayâ€™s high andÂ reaching the descending median line resistance. Soon after the Wheat posted the high, Â the projected reversal swing date kicked in and the market reversed lower. Wheat is currently trading over 17 cents off the the dayâ€™s high. The market is poised to reach the projected target objective of $4.58. I may have a new recommendation in TMV Swing Trade Report.
On January 12--a projected reversal date--the USDA raised its estimates for the 2009 corn crop and triggered a free fall, with corn closing limit down for the day. The selling continued overnight and into the next daily session with the market trading to a low of $3.68 before some short-covering caused a slight rebound.Â That was a 54-cent drop in two days. The action/reaction lines are projecting a possible target objective at $3.50 on or before the January 25 reversal swing date. However, the market will likely rebound to retest the gap and descending median line before resuming the trend towards the reaction line. This may form a bearish reaction swing and sell pattern.
Corn had been trading on the weak side (below) the ascending median line until it reached the sloping reaction line one day before the projected reversal swing date. A bearish monthly Crop report was released on the reversal swing date, causing the market to open sharply lower.
March Wheat pulled back to the 20-day EMA ascending parallel line on the January 8,Â projected reversal swing date. This is a "double cross" pattern, at strong support, during reversal timing...a triple threat. Wheat has respected the parallel line support and is leaving good separation from the low to the close. I consider this a strong continuation pattern and could trigger another strong upward swing. Watch for a trade above the prior high to trigger strong buying.
Corn dropped to the price level where theÂ 20-day SMA and lower parallel line cross. This was also inside the 60% buy window. The sharp price drop was caused by 6000 electronic stops triggered at the open of the pit session. The market quickly absorbed the stops and rebounded. A trade above the high of Tuesday's "inside day" ($4.18) will be a trend confirmation. I look for a possible strong rally into the January 5th reversal swing date.
From the TMV Swing Trade Report (12/21/09) The Treasury yield curve, a barometer of the health of the U.S. economy, widened to a record high, as investors bet an accelerating recovery will fuel inflation and hurt demand for unprecedented sales of government debt. Chart wise, T-Bonds confirmed a bearish swing pattern, with a close below the descending median line. This portends a price swing towards the lower parallel line as the market approaches the December 29th. Â The T-Bonds sell was triggered at 116-30 with the stop loss at 117-25.
January Soybeans have completed a bullish ABC continuation pattern after finding support at the 20- day SMA. The SMA is acting as a springboard for the next bullish leg of the current upward trend. The reverse/forward count projects a minor reversal swing date for December 17, followed by a major reversal swing date on January 4th.
One day after breaching the August 13th high and reaction line, Soybeans are trading over 20-cents lower. This is a short-term pause in the strong in a strong upward trend. Wednesday's lower close will form a bullish reaction swing with a potential target objective above $11.00 and the future reversal date on December 9.Â I will have specific recommendations in my daily swing trading report.