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.
Here is a quick set of guidelines for the Fibonacci retracements to help with this article. You can find all the rules/guidelines and examples on any deviations from these four basic rules on our website.
1) The Golden rule, any market that is going to continue the current trend must hold 38.2% and a new high/low should follow.
2) Markets that are extremely strong/weak will only go 23.6% and a new high/low should follow. Typically a runaway market.
3) The 61.8% rule is, any market that holds 61.8% should go 61.8% of where it just came from. Usual happens when a market is directionless, or in a consolidation period.
4) The 78.6% rule is, any market that holds 78.6% should go 78.6% of where it just came from. This is also where a lot of Bull markets end and start.
Charts are courtesy of Barchart.com
This is an update to the article published on 9/16/21 called, Grains, short term resistance
After trading below the long term swing point of 518.00 and then holding the 200 day moving average at 504.00 on a closing basis, it is now back above the long term swing point.
By holding this area the long term target is new highs for the year, however as we always say we have to watch all the retracements on every move to see just how strong, or weak the market is. It is currently at 38.2% of the move down, this is 534.50 and it is the short term swing point.
The failure to get above 38.2% at 534.50 kept the short term trend negative and the target on a break from there should be new lows. It will still have to take out the 9/10/21 low at 497.50 to turn the long term trend negative. Provided they did take that low out the next target will be 61.8% at 442.00. Not making a new low on the break from 38.2% would be a positive sign especially if it came from the 78.6% retracement at 506.00. As we said above the 78.6% level is also where a lot of Bull markets end and start. It would also keep the long term trend positive.
Wheat held 61.8% at 681.00 and being 61.8% we should be looking for 61.8% the other way based on the ONE44 Fibonacci rules and guidelines, this is 745.00. Watching all the retracements, it still has to get above 38.2% at 719.00 to say the short term down trend that started on 8/13/21 is over. Provided 719.00 is all they can get to on this rally look for a retest of the recent low.
Wheat failed to get above 38.2% of the recent break at 719.00 and the short term trend remains negative and you can look for a new low for the move. Like the corn, failing to make the new low is a positive sign and if that also comes at 78.6% (685.00) it would be even better. The long term trend remains positive until 38.2% of the whole move up is taken out, this is 627.50 and this would be the target, provided they make new lows on the current break.
As you can see on the chart, Soybeans are well above their long term swing point of 1235.00, however they have been in a short term downtrend since 8/16/21. It will take a close above 38.2% of the move at 1307.00 to turn the short term positive, if so, look for 78.6% at 1355.00. Failing to get above 1307.00 can send it to retest the recent low and even the long term swing point of 1235.00.
Soybeans also failed to get a close above 38.2% at 1307.00 keeping the short term trend negative and they are now testing the low on 9/10/21. Like Corn and Wheat, failing to make a new low should send them up through 38.2% at 1307.00 and give us an upside target of 1355.00, this is 78.6%. With a new low, look for the long term swing point of 1235.00.
We are looking for your input, if there is a stock, or futures market you would like to see us do Fibonacci analysis on, email the ticker symbol to [email protected]
We will update these on the ONE44 website along with posting them on Barchart.com.
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