This is a sample entry from Tom Dosdall’s newsletter, Technical Ag Knowledge, published on Monday May 23, 2016.
**Crop progress numbers will be released today @ 3PM (CST).**
Corn is starting to look a little tired here at the top of the range and may need some fresh fundamental news to assist a move through psychological and technical resistance at $4.00. The dark green bar on TAS Navigator indicates a weakening bull trend. First downside objective for the bars this week is $3.84^2 followed by $3.74^4. Bias: Mildly Bearish.
Upper resistance has defined itself at $10.91^4 and the market appears to be showing signs of having a near term top in place. Momentum is starting to shift back toward the bears who could be targeting a decline toward $10.25 at which point we expect the buyers to potentially reappear. It should be noted, a close above $10.91^4 will be considered a strong technical development and would shift the market sentiment to bullish. For now, however, bias is mildly bearish.
I know the fundamental story in the wheat market is bearish as well right now, but on the technical side I feel that the charts lend a little more optimism. I am getting a warning signal that the selling momentum is showing signs of tapering which is usually the first sign of a potential trend reversal. That said, I expect to see a lot of sellers waiting to greet the bulls in the 5.15-5.30 zone – although a break above there would be significant. On the other side, buyers sure have liked to step in and support this market at 5.00. Due to those tight ranges, I feel the technicals are more inclined to favor a more neutral near term outlook.
I’d like to be bullish wheat on a bounce off support at $4.60 although I’m also wary of a potential corn and soybean correction dragging this market lower short term, especially if the US Dollar continues to strengthen this week. The 2016 support line is at $4.59 so watch to see how the trade interacts with this level. If it breaks, I think we are looking at the $4.31 trend line for the next level. If wheat can catch a bounce from this price, however, the short term bulls may want to target $4.75 before the week is out. Let’s see how this morning goes… Bias: Neutral.
The 50 day simple moving average (SMA) has supported the market nicely last couple of weeks and should be watched again this week for a potential indicator of near term trend. Momentum on TAS Navigator is descending toward the 0.0 line which tells us that sellers are trying to enter the picture and take control. A close below 0.6059 would be meaningful confirmation of this and could set up 0.5700 as the next downside target. On the flip side, a close above 0.6223 would turn the trend back up and re-target the April highs near 0.6420. For now, we are stuck in the middle so watch and wait. Bias: Neutral.
Friday’s bearish COF report could threaten to derail the bull trend picture which was beginning to take shape in Feeders the last couple of weeks but we will watch on Monday to see if the close can stay above 145.00. In my opinion, this will be supportive for price and a sign that the technical bulls are discounting the report as not a big deal. The 50 day SMA is likely going to be a headwind for the first part of the week at 150.700. Bias: Mildly Bearish.
A close below 116.500 on Monday will tilt the scales back in favor of the bears and could re-introduce April lows near 111.500 as a downside objective. Bias; Mildly Bearish.
Thursday’s close below 81.850 put the bears in control and essentially put a bookend on the recent bull run. Friday’s strong follow through sets the market up for more downside. Bears could be targeting April lows near 77.500. A close back above 81.850 will put the market back in a neutral balance. Bias: Bearish.
Last week’s push through the 50 day SMA and TAS demand zone at 95.100 combined with a crossover into positive territory on TAS Navigator puts the bulls in control for the week ahead. Medium term target could be 97.325 which if true could provide headwinds for commodity market rallies. A close back below 95.100 puts the market back into a neutral balance. Bias: Bullish.
Crude Oil is holding in a bull trend formation with 46.01 as the key price level on the downside to watch and 51.00 as the eventual upside target. A trade below 46.01 would be a meaningful bearish development and could preempt a decline back toward the 50 day SMA near 43.62. For now, however, we remain in a trend and until otherwise noted the trend is your friend! Bias: Mildly Bullish.
**Crop progress numbers will be released today @ 3PM (CST).**
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