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Soybean And Corn Fail To Turn Up From Key Support, Now What?

ONE44 Analytics - Sat Feb 24, 1:03PM CST

Grains

(ZSH24)(ZCH24) 

The charts below are key to this analysis.

Soybeans and Corn had key Fibonacci retracements that they needed to hold for any chance of a rally. 

In March Soybeans it was 1165.00 and in March Corn it was 425.00 to 410.00. They both failed to hold these levels, so.now what happens.

Whenever you are using the Fibonacci retracements with the ONE44 rules and guidelines, there is always, what the potential is if the market holds the level and what to look for when it does not. Each retracement level 23.6%, 38.2%..... has its own set of guidelines. They tell us how weak, or strong the market is and what keeps the trend intact.

Now we can go over how we got down to these key levels in the first place.

Soybeans

March

We will start with the 11/15/23 high and the 78.6% retracement. The short version of the 78.6% ONE44 rule is,

Any market that hits 78.6% should go 78.6% back the other way. This is also where a lot of Bull markets end and start.

As you can see on the chart the 11/15/23 hit 78.6% of the 7/24/23 high and 10/11/23 low at 1397.00.

This is what we said to our subscribers,

11/16/23

Use 1400.75 as the swing point for the week.
 

Below it, we will still watch for this, following the ONE44 78.6% rule, look for 78.6% the other way at 1310.00, this is now a major Gann square as well. Any setback that holds 38.2% at 1362.00 keeps this market very strong and new highs should follow

As you can see on the chart it hit the area of 1310.00 on 12/7/23. 

Then on the update from 12/7/23 we said this,

The 90 cent break from 1397.50 (78.6% level) is just shy of the 78.6% target and the 1310.00 major Gann square.
 

Use 1310.00 as the swing point for the week.

Above it, look for 78.6% the other way at 1388.50. The short term target is the area of 38.2% at 1348.00 and the 1353.25 major Gann square, failing to get above this area is a negative sign and new lows can follow.

Below it, look for the area of the 1265.00 major Gann square and 61.8% of the 5/31/23 low and 7/24/23 high at 1352.00. On an extended move lower, look for 78.6% of the same move at 1205.00.

We were looking for 78.6% the other way at 1388.50, however it stopped in the area of 38.2% at 1348.00 and the 1353.25 major Gann square and new lows followed and it sent it down to the target on an extended move lower at 1205.00. This is why we watch all the retracements on every move regardless of the longer term targets. If a shorter term (smaller range) retracement turns the market it is important!

In the update on 1/18/24 we posted this,

 

Use 1207.00 as the swing point for the week.
 

Above it, with 1207.00 being a 78.6% retracement the long term target is 78.6% the other way at 1380.00 based on the ONE44 78.6% rule. The short term target is 38.2% at 1287.00, it needs to take this level out to turn the short term trend positive again. Any rally that can't get above the 1265.00 major Gann square keeps the short term trend extremely negative and new lows can quickly follow.
 

Below 1207.00 The short term target is 1165.00. The long term target is 61.8% on the long term chart at 1030.00. Before then there are major Gann squares to look for support and then swing points if taken out at 1150.00,1113.00 and 1080.50.

The rally from 1205.00 failed to get above the 1265.00 major Gann square and new lows quickly followed. It also hit the short term target of 1165.00, this was 61.8% on the long term chart and a level we thought could give us a good rally, however it failed to do so and could not even get back above the 1185.00 major Gann square that we wanted to see to say its a possible bottom. 

Our long term target is 1030.00 and the short term target is the next major Gann square at 1113.25. You can use 1165.00 as the short and long term swing point for now. When this market finds a bottom we will put out upside targets and watch to see if any rally can hold retracements below to confirm a trend change.

Corn

March

We had key long term retracements at 425.00 to 410.00 and it failed to hold both. This was a long term target setback in 

10/19/23

Use 521.75 as the swing point for the week.
 

Below 521.75 the short term target is the 493.00 major Gann square. The long term target is 78.6% of the contract high and low at 425.25.

The market never could get a rally going for very long after hitting the 23.6% area at 521.75, this retracement always shows extreme weakness. The break took it to the area of 425.00 to 410.00 four weeks later, but did nothing to show it was turning back up from this area. 

From 2/15/24

Below it, a failure to turn higher from this area (425.25 to 410.00) keeps the trend extremely negative and there will only be major Gann squares to look for support, the next two are 405.00 and 489.00.

Use 410.00 as the swing point for now and look for the major Gann squares below. We will watch the retracements above to see if there is any indication of a turn in this trend.

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.

If you like this type of analysis and trade the Grain/Livestock futures you can become a Premium Member.

You can also follow us on YouTube for more examples of how to use the Fibonacci retracements with the ONE44 rules and guidelines.

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On the date of publication, Nick Ehrenberg did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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