As we put out on Tuesday, Key levels above have been hit in Grains The May and July contracts hit their long term target at the 810.00 major Gann square. The May contract had one close above and then right back below it twice. As we say in the "About" section under "What violates a level" ,
When you get to a key levels based on the Fibonacci retracements, or Gann squares we always say it can trade below/above the level, but the close is key to it violating it. We also want to see a second close above/below to confirm it and if so, you can now use that level as the short term swing point and look for the target based on that retracements rule. ( We also want to see the second close lower than the first one below a key area and the reverse above a key area.)
The July contract never closed above 810.00, or its own major Gann square above.
December Corn remains the strongest in relation to the retracements and we will see if the Old crop hitting the long term target can turn the New crop down as well, again Corn has not violated any key levels below to say a bigger break is coming, however the level hit above in the May contract can set it back for the time being and into some key short term levels.
In Tuesday's special update we said,
May Wheat has traded around the 38.2% (1120.00) level back to the contract high, it has yet to get a couple closes above it
On a setback from 1120.00 look for 38.2% of the recent rally at 1068.00 and the 1059.00 major Gann square
July is trading up against the 1140.25 major Gann square,
May Wheat broke from 1120.00 and hit the combination of 38.2% at 1068.00 and the 1059.00 major Gann square. July Wheat has come off 80 cents from the 1140.25 major Gann square so far.December Wheat is the strongest position in relation to the Fibonacci retracements, here too, we will see if the Old crop hitting resistance can send the New crop lower.
The May, July and November contracts all hit 78.6% of the recent break and had two closes above it, which then turns that level into a short term swing point as mentioned in the Corn overview and "What violates a level". Friday's close should give us a good indication of where the next $1.00 move goes.
We have moved into the July contract for all Grains in this week's update. We have added the Hourly Fibonacci charts for July. We will continue to watch the May contracts and if anything stands out differently from the July contract we will alert you.
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Here are some key things to watch for when using the Fibonacci retracements, or major Gann squares. Whenever a key retracement or major Gann square is taken out we want to see two close above/below it to confirm the violation of that level. When it is a major Gann square you can look for the next major Gann square above/below as the next target and use the one you just violated as the stop out/swing point. When it holds a major Gann square you can also look for the next one above/below and use it as the stop out/swing point. When it comes to the retracements, you have to follow the ONE44 Fibonacci rules and guidelines. Holding a retracement will give you a target and failing to hold it will also give you a target based on those rules.
Being this is a weekly update, it is best to know how the retracements work based on our rules and guidelines so that you can adjust them during the week. By using these guidelines you will also know what is possible when any of the levels put forth in these updates are hit.
If there is a major move during the week that throws all the previous levels out of whack we will send out an additional update to cover that.