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
Having said this,
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.
The low yesterday held above 78.6% at 685.00 and this sets up the next target of 745.00. The reasons are from a few different ONE44 Fibonacci rules. First the 61.8% rule, after holding 61.8% on 9/10/21 the upside target became 61.8% the other way, this is 745.00. The second is the 38.2% rule, reacting to 38.2% should send them to a new low to keep the current trend intact and any failure to do so should send it up to 61.8% of the same move. This gives us the same target of 745.00. The third is the second part of the 78.6% rule stated above, This is also where a lot of Bull markets end and start. This is all happening in the short term view on an hourly chart. The long term trend remains very positive and we will be looking for new highs for the year (long term). With a solid close below 682.00 we will look for the long term swing point of 627.50, this is 38.2% of the 2021 high and the 2016 low.
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