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.
Charts are courtesy of Barchart.com
This post just shows how it does not matter what the market is, or where in the world it is traded, they all adhere to the Fibonacci retracements.
DCE November Soybean Meal
The chart below is key to understanding this analysis.
Using the Daily continuation chart and starting with the last bull market bottom in 2019 you can see the bottom in November of 2021 hit 61.8% to that low.
The rally from there took it on another Bull run up to the high on 3/24/22. The setback from there went right to 38.2% of that move on 4/1/22. The target by holding 38.2% following the ONE44 rules and guidelines is new highs and any failure to make the new high should send it to 61.8% of that same move.
It failed to make a new and hit 78.6% back to the high on 5/23/22 and then again on 6/10/22. The 78.6% rule says to look for 78.6% of where it just came from and it could be the end of the Bull run. It did hit 78.6% on 6/23/22 and took out 38.2% back to the 11/16/22 low, however it went right to 38.2% back to the 2019 low on 7/6/22.
This shows the importance of knowing where the long term retracements are. The first rally from7/6/22 went up through 38.2% of the break, always a good sign and the setback after that hit 78.6% on 7/22/22. So now you have the long term swing point holding at 3600 and the retest of the low failing to make a new low at 78.6%, another positive sign.
The next setback after holding 78.6% held 38.2% on 8/4/22, another positive sign and after making a new high for the current leg up it held 23.6% on 8/16/22 showing an extremely strong market. The rally from it sent it new contract highs and that is where we are today.
Since making the new contract high, it has yet to close above it, which is always concerning. Unless it can close above 4231 look for a setback to go 38.2% of the current rally at 4010.
The long term swing point has now moved up to 3620.
If you like this kind of analysis and trade the U.S. Grains, give us a look Grains Weekly update.
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.