ONE44 Analytics where the analysis is concise and to the point
Our goal is to not only give you actionable information, but to help you understand why we think this is happening based on pure price analysis with Fibonacci retracements, that we believe are the underlying structure of all markets and Gann squares.
For the ONE44 Fibonacci rules and guidelines to help with this article, go here.
Charts are courtesy of Barchart.com
The high in Corn yesterday hit 717.50 this was 78.6% back to the ATH on the Nearby continuation chart. This happened at the same time that the Soybeans hit their long term target of 1765.00 and Wheat fell 9 cents short of the 960.00 long term target.
Can this be a longer term top? Our long term target in Corn is still 810.00, however they have come off hard from the current top, so the best way to tell if it will be a longer term top is to watch the Fibonacci retracements below.
The two key levels to retrace back to are the contract low and then the last time they held the long term swing point of 520.00, this was hit multiple times starting on 5/26/21 and again on 6/24/21, 7/9/21, 9/10/21 and 10/13/21. The lowest level to use is 506.75. Using that low, 23.6% back is 668.00. The 23.6% ONE44 rule states that any market that holds 23.6% is an extremely strong market and usually a runaway market. You can see on the chart that the last two lows before the current top held 23.6% on 1/3/22 and 1/14/22 and then again on 2/3/22. If 668.00 is all they can setback, look for new highs and the long term target of 810.00.
The next most important area to look for support is a combination of retracements back to the two key lows. This level is 637.50, it is both 38.2% back to the 506.75 low and 23.6% back to the contract low, this is a more likely target coming off of 78.6%.
The long term swing point has now moved up to 583.00, this is 38.2% back to the contract low and 61.8% back to the 506.75 low. It is this level that would have to come out to say the multi-year rally we have been calling for since the fall of 2020 would be over.
Sign up for our Free newsletter here.
If you are looking for option plays to go with the ONE44 levels, we highly recommend going to the Barchart webinar library where John Rowland has plenty of information on Option strategies.Here is one, Using the Long Strangle Options Strategy for Opportunity Trades
FULL RISK DISCLOSURE: Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Commission Rule 4.41(b)(1)(I) hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. Past performance is not necessarily indicative of future results.