Rich Nelson: No technical resistance to slow markets
By Rich Nelson
Allendale Inc., Director of Research
Soybeans: Overnight saw the European wheat market making new contract highs once again. With no change to their forecast, they were off to the races once again. As was mentioned before new contract highs mean that there is no technical resistance to slow their market. Overnight beans accomplished a similar feat by breaking past the 992 ¾. That now opens the door on the November contract all the way up to next resistance of 1035 ½.
It is not to say this move means a more bullish market ahead for beans. If the European wheat falls off for any reason Sunday night then our grains will as well. What this does mean is that additional gains in wheat will be easier to follow until next resistance. We may see the percentage gain compared to the wheat increase starting today through next week.
It will be a long weekend to wait and see what happens with their wheat Sunday night. It is still evident that selling on a down turn is not a bad way to approach this market. We may miss the high but we are not guessing as to when weather will change, that is often a loosing trade. Of course we can still scale in sell orders on the way up and now that resistance is high above the market we can aim high on each given day.
Looking ahead to next week, all eyes will stay on the weather both ours and overseas. A serious market break will be likely if forecasts turn even slightly bearish. One thing is for sure and that is that volatility will be high next week. Keep a close eye on this market as one day not watching it could mean a 20+ cent move that will change the direction for the rest of the week.
Volatility is the word that will describe this market well next week.
Bullish forecasts can move this market higher quickly now that near term
resistance was taken out. A bearish forecast has always threatened to
take gains away quickly. On any given bullish day we can aim high with
our expectations with little technical resistance above. On a bearish
forecast be ready to pull the trigger on sales as we don’t have much
other fundamental news to back up recent gains…Ryan Ettner
Director of Research
4506 Prime Parkway
McHenry, IL 60050