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South Central Iowa | DJM, I think that you shouldn't be too afraid if we dip below that $10.23 area. I still think that we pick up support from the 38.2% area. I really am hoping for it because we would have a carbon copy of the October rally and would set up the pattern for continuation of the rally and a third swing up. I believe you are using Elliot Waves and I don't understand that trading method, but have read other places of the $10.23-$10.28 area being a major multi-year pivot location. I have no opinion on it, but I thought I would offer up that there are others that agree with your thinking.
I would like to add here two Fibonacci retracements of these two swings. When they are side by side you see the pattern; 38.2% is our 0 on swing 2, 61.8% our 23.6%, 76.4% our 38.2% and 100% our 61.8%. Interestingly our triangle or wedge on swing 1 came to a close on our Golden 61.8%.
I would not be concerned with a dip below $10.23 but could see how it concerns you if that is the system you like to trade. I personally would be concerned with a breakage of $10.09'4 but only worried if we break 23.8% at $9.96'4, because then I would be afraid of chart break down or the formation of a head and shoulders pattern if support is picked up from the $9.75'2-low $9.80's area. Now it is possible if support is picked up from there that we could run up and run down again, say up to $10.30's and down to $9.80's and never break the neckline and just trade a good sized range for the rest of winter, but the soybeans do not seem to be content to trade sideways.
I will include some charts for anyone who wants to see them. The first is the Fibonacci's of the two swings thus far, numbers explained above. If we do bounce of $10.09'4 and we confirm our pattern, chart 2 shows the numbers that would be upside targets for a 3rd swing in our winter rally. I like that top number target a lot on chart 2! It synchs perfectly with pattern and shows a failure of the next swing to break $11.00, falling short at $10.99'2. That will allow us to pullback completely in the $10.00's and I believe that their is more appetite to buy, both physical and paper, in that range than in the psychologically higher range of $11.00. But it would set us up well to hold that $10.44 area during the time when many are begging bankers for money. That would make it less like begging and more like an actual business proposition.
The two naked charts at the end are FAKE CHARTS! They are not real! They are merely hypothetical charts that show my two directions. The 3rd chart shows a continuation of the pattern I believe we are in if it confirms at $10.09'4 area. The 4th chart shows the formation of the head and shoulders pattern with a breakage of the neckline; this one would be cause for concern! I am including them for people who might be interested but are more the visual types. These are the two patterns that you should watch being formed in my opinion. If we break $10.09'4 and $9.96'4 go down and pick support off of the $9.80 area and then rally up to $10.30-$10.40; you would be wise to seek some price protection in whatever form you choose. If that scenario occurs, I will sell 25% of my 2017 Soybeans; I have not sold any yet.... But anyway, those two are patterns that I believe will form that you might want to watch for. And remember, THEY ARE FAKE!
Edited by Conan the Farmer 12/4/2016 16:42
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 29OWOeAA.png (81KB - 52 downloads)
29OsUrHMaO.png (97KB - 53 downloads)
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Jan 17 soybeans
