Weekly Grain update 12/4/22
The reactions from the 78.6% retracement was on full display this week.
ONE44 78.6% rule
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.
When a market does react to 78.6% it usually creates wide swings that go through all the other retracements, this either happens in very large trading ranges or very small, it is also the level hit most often when the market is reacting from 23.6% and 38.2% and fails to make the new high/low. This is where a lot of Bull runs start and end.
In our Special update before the opening on Wednesday we said this,
Overall this market remains in a very positive position by being above the long term swing point (1303.00) and it is building a very big base for the next run up (in our opinion). As you have seen since July this market is in a big trading range that has been doing a lot of 61.8% to 61.8% moves and 78.6% to 78.6% and we can see the wide sweeping moves continuing for the next month.
The January contract hit the first target of 1455.00 and we are still looking for the next major Gann square above at 1500.50 on the rally from the previous one at 1412.25, however with the quote above we have to watch 78.6% at 1480.50 to see if this market is going to continue with its wide swings between the 78.6% levels. In the March contract it hit 78.6% at 1480.00, this was our longer term target.
For now use 1481.00 as the swing point in the Jan. and 1480.00 in the March. We know following the ONE44 78.6% rule, that a break from 78.6% can send it 78.6% the other way, so in the Jan. the long term target is 1386.00 and in the March it is 1395.00. The short term targets on a setback from here is 38.2% at 1433.00 in Jan. and 1442.00 in the March, holding these levels would be a very strong sign for the market.
What followed was a 50 cent break and we are looking for the wide sweeping moves to continue.
In Soybean Oil on Wednesday we said,
December Oil hit the 76.64 major Gann square and 78.6% at 77.10.
In the January contract it also hit 78.6% and a major Gann square at 74.45. We will now use the 78.6% levels as swing points.
Above it, look for the next major Gann square at 81.21 in Dec. and 79.01 in Jan.
Below it, the longer term target is 38.2% in both these markets at 69.50 in Dec. and 67.85 in Jan. The short term target will be one major Gann square back at 72.40 in Dec. and 70.19 in Jan.
The break from 74.45 (78.6% and a major Gann square) in January has come off $10.00 so far and has ended this Bull run for now, as it also took out 38.2% of the move up.
February Hogs also hit 78.6% on 11/17/22 and a $7.00 break followed.
You can find more about the 78.6% retracement in this week's video. LINK
Being this is a weekly update we give all the key levels to watch for the week using Fibonacci retracements and Major Gann squares. We set up scenarios to look for when a level holds, or fails based on these methods, so it is very important to know for yourself how to use them following the ONE44 rules and guidelines. The best way to get a better understanding of these methods is to read all the posts (even if not on Grains) and watch our YouTube videos, as we explain why we think what we think based on the rules and guidelines. It is also important to view all the charts, as they have the key levels marked on them, if there are extended moves.
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