Provided you have been following our previous posts on Grains, you would know the meteoric rallies in Soybeans, Corn and Wheat all came from their long term swing points.
These were the 38.2% level from the contract highs and lows and as the 38.2% rule states,
Of these, 38.2% is the single most important retracement and is the level we use for the "Golden Rule". This rule being, " any market that is going to keep its current trend must hold 38.2%". As long as it does the trend will continue and it should make new highs/lows from that retracement.
We also know that many of the setbacks on this run up have only been able to 23.6% back and this rule states,
Extremely strong/weak markets will only go back 23.6%. This is Typically a runaway market.
The break from the long term target held above 23.6% of the contract high and low keeping the trend extremely positive. We will now go inside last week's trading on the hourly chart.
The first rally after holding 23.6% took the market right to 38.2% back to the contract high. Following the ONE44 38.2% rule we know a break from here can take it to new lows and a failure to do so should send it to 61.8% of the same move. The break from 458.00 did not make a new low and held 78.6% and the 78.6% rule is,
Any market that hits 78.6% should go 78.6% back the other way. This is also where a lot of Bull markets end and start.
Keep in mind this is the micro scale and this just shows how all the ONE44 Fibonacci rules and guidelines work the same. The failure to make the new low and holding 78.6% sent it on another run higher that took it to 61.8% completing the other part of the 38.2% rule. Now the 61.8% rule is,
Whenever the market holds 61.8% of a move, look for it to go 61.8% of where it just came from. This usually happens when a market is directionless, or in a consolidation period.
The 470.00 high that was 61.8% sent it to 61.8% the other way at 452.00. The rally from there sent it back to 61.8% at 470.00 and it is now consolidating between the two levels. Other short term levels to watch are the two 78.6% levels, one above at 477.50 and one below at 447.00, if either is hit, apply the 78.6% rule.
Soybeans, Soybean Meal have hit their long term targets, Corn and Soybean Oil are getting close and Wheat has exploded through the long term target and more.
We will now go over what to look for in each of these markets with the ONE44 Fibonacci rules and guidelines and the Gann Law of Vibration charts in the premium members section.
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