Wheat long and short term analysis
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.
In today's example we will look at the long and short term view using the ONE44 Fibonacci rules and guidelines.
Starting with the long term, the low back in July hit the long term swing point, this was 38.2% of the contract high and low. With it being 38.2% the target on a rally from there was new highs. This was accomplished on 8/13/21. Before this high was made there was one other shorter term 38.2% level that held on 7/26/21, this also sent it to a new high for the move, as it should to keep the trend positive. The new contract high on 8/13/21 reset the long term swing point, bringing it up to 626.00. This is the level that would have to be taken out to turn the long term trend negative. Any break that holds 23.6% of that same move at 687.50 keeps the trend extremely positive.
In the short term we will start up at the contract high on 8/13/21. It is the highlighted area on the hourly chart. The first setback after the new high hit 23.6% back to the 38.2% retracement on 8/6/21. The target on a rally from 23.6% is the same as from 38.2% and this is new highs. The failure to make a new high came at 78.6%, as you know from the rule above, this is where a lot of Bull runs end. This is the short term view and rules and guidelines are the exact same as the long term. The first rally after the break from the new contract high hit 38.2% at 755.00 on the 18th. The break from there took it to new lows as expected, if it's going to continue the current trend and just above 38.2% to the low on July 9th. The rally from there fell short of 38.2% back to the contract high and the new hit 38.2% back to the July 9th low.The rally from 38.2% should take us to new highs, however this is why we always say you have to watch all the retracements on any move. The rally from 38.2% at 722.00 could only get to 38.2% of the move down at 744.00 keeping the short term negative and a new low followed. The next rally after the new low fell short of 38.2% at 735.00 and again a new low followed.
There is a combination of retracements that can turn this market back up between 687.00 and 682.00, the first is 23.6% back to the contract low and the second is 61.8% back to the 7/9/21 low. Holding this area keeps the long term trend very positive and our long term target is 960.00. In the short term it will have to take out 38.2% back to the high to turn the short term positive, currently this level is 729.00.