Soybeans Bounce Up From Lock Limit Down

Soybeans have touched and bounced off their lock limit down price this morning, after moving modestly higher overnight on weak volume. The first chart is the short-term intra-day for today. For the past few days, s0ybean trading has been listless and we have seen unconvincing trading within fairly narrow ranges. Trading has been fairly poor. Today, we have seen a solid break-out to the down side. It remains to be seen how the market will play out today.

Daily Chart
We see in this daily chart that the Exponential Moving Average continues to provide dynamic resistance to soybean prices, and prices have now broken down as I anticipated that they might. Prices have now broken through the previous soybean low of March 10th. While I personally am resistant to trying to predict the future, partly because it creates a bias in my mind that leads me to make market errors that cost me money, I also recognize what happens when prices pass below the Exponential Moving Average. It tends to serve as a form of dynamic resistance. Note on the chart that prices havve touched the EMA four consecutive days in a row, and then moved substantially lower. Why? I don't know. I just observe the phenomenon. And because of this phenomenon and its repeating pattern, I also have expectations about market behavior based upon past performance of these indicators over many incidences. The Klinger Volume indicator here has continued to show heave selling of soybeans. I still expect that this soybean bear will be short-term in nature, due to the strong longer-term fundamentals and depletion of grains in storage in the United States, but this price break-down may be a much needed, albeit temporary, correction.
Exponential Moving Average
Excerpts from Robert Colby's book, "The Encyclopedia of Technical Market Indicators":
"The EMA is the best of the moving average techniques, and it is increasingly preferred by technical analysts over other moving average methods."
"...the EMA rrepresents an excellent compromise between the overly sensitive weighted moving average and the overly sluggish simple moving average."
"the simplest and most streamlined of all moving average techniques."
"A significant advantage of this superior computational method is that the EMA is never distorted by old data suddenly dropping out of the calculation."
"This is the best simple trend-following indicator we tested against daily DJIA /Dow Jones Industrial Average/ data."

For more information on the Exponential Moving Average and the settings that Mr. Colby used, as well as many other technical indicators, please buy his book.