This chart for wheat shows the daily on the left, and the intra-day market noise on the right. I am not trading wheat today for obvious reasons. The most significant aspect of this chart is the left one, bottom panel. It shows that heavy buying is stepping into the wheat market, following a drop of 40% over the past two months. I have mentioned this before over the past several days, but it appears obvious that there are some big players beginning to buy wheat. It looks like wheat is forming a bottom. At this point, wheat could simply trade sideways in a consolidation pattern for a time. (We often erroneously assume that prices trade only two directions -- up or down. Not so! Prices can trade sideways for very long periods of time.) Or wheat could begin a rebound. Much will depend upon fundamental factors like harvests in Australia and weather in the Northern Hemisphere. I will be watching wheat closely for signs that a new bull market may begin soon.Friday, May 16, 2008
Wheat -- Buying on Daily Charts
This chart for wheat shows the daily on the left, and the intra-day market noise on the right. I am not trading wheat today for obvious reasons. The most significant aspect of this chart is the left one, bottom panel. It shows that heavy buying is stepping into the wheat market, following a drop of 40% over the past two months. I have mentioned this before over the past several days, but it appears obvious that there are some big players beginning to buy wheat. It looks like wheat is forming a bottom. At this point, wheat could simply trade sideways in a consolidation pattern for a time. (We often erroneously assume that prices trade only two directions -- up or down. Not so! Prices can trade sideways for very long periods of time.) Or wheat could begin a rebound. Much will depend upon fundamental factors like harvests in Australia and weather in the Northern Hemisphere. I will be watching wheat closely for signs that a new bull market may begin soon.
