March 2020 Wheat Update 6

Arby's called. They're changing their motto to "We got the wheats!".

We had a big today today, and its hard not to exit with the current profits but I'm still holding for the original 561 target at the 27.2% Fib expansion. However, we closed over the Bollinger Band again, and may have completed a "3 drive to a top" pattern. So I wouldn't be surprised if we get a pull back for a few days or so then a recovery and continue on up. But the momentum is so strong, and we're still in the BB/KC break out, its not unlikely we'll continue up to the target from here.

Either way, I'm very thankful on Thanksgiving weekend!

March 2020 Wheat Update 5

Took a little dive. The right 3 candles are close to an Evening Star pattern, which is bearish, and today we closed near the bottom of the candle, which is also bearish. Plus the Stochastics haven't pulled back enough for comfort.

However, we had lower volume, which you'd expect the day before Thanksgiving, and we closed near the 3ema. The longer term pattern is still bullish.

So I'm sticking with it for now but I did move up my stop to lock in a couple points. Got in at 515 1/2 with a stop at 510. I moved the stop up to 517 just before the wheat market closed at 14:20 ET.

As long as we don't close below the 8ema, I plan to stay in the trade. Have a Happy Thanksgiving.

If you need to know which color lines are which indicator, see the link in my profile.

March 2020 Wheat Update 4

Don't fear the Hammer. Today we made a Hammer Candle, but with just a tiny wick so its not a perfect Hammer, but its close enough. Given that stochastics are over 80 and we closed over the Bollinger Bands yesterday, a Hammer Candle would normally suggest we're at a local high. 

However, we closed near the top of the candle today and well above the 3ema. And the medium term pattern is a Frypan Bottom with heavy relative volume yesterday and today. This says profit taking today had a very limited effect. Because we closed near the open, buying pressure must have been close to the selling pressure. These are all bullish signs.

Also, look at the Hammer Candles on 9/16/19 and 10/1/19. They both were followed by a relatively shallow dip then a nice move higher. If we get any dip, I'd expect it would be similar.

Yesterday I mentioned the BB/KC Squeeze we've been in with a possible imminent break out. If you look closely you'll see the Bollinger Bands are just beginning to cross over outside the Keltner Channel. If we get follow through in the next couple trading days, its a signal suggesting another 5-7 days in the uptrend, with about a 70% success rate if I remember correctly.

We have limited trading hours the rest of the week:

https://www.cmegroup.com/tools-information/holiday-calendar.html

Limited hours are a little frustrating and worrisome, but it makes sense to me to hold through it.  Keep your stems crossed. (Leave a comment if want an explanation for that little bit of dad humor.)

March 2020 Wheat Update 3

Check it out. Its a beautiful thing. Look at the base of today's candle. No wick! Just started up and was strong all day. Look how close to the top of the candle it closed. Tiny little wick. That's a bullish sign. Look at the huge relative volume. That's enthusiasm. Close 533 - Open 518 3/4 = 14 1/4 points x $50/pt = $712.50/contract. Not too shabby. 

Wouldn't be surprised if we get a bit of a retracement tomorrow from profit taking. As long as it closes above the 8ema I'll be happy. 

Also, notice how the Bollinger Bands are about to break out through the Keltner Channel? If we get another strong bullish candle tomorrow and it closes with the BB's outside the KC, then we have a squeeze break out and the odds are we'll get another 5-7 candles in the upward direction. That should easily hit the target at the 127.2% expansion, around 561.

Keep your stems crossed.

March 2020 Wheat Update 2

My original stop loss is 510 and I haven't changed it. Yesterday's low went down to 511 and today was 511 1/4. Could not have been much closer. But I held on and it paid off today. Price spent most of the day above the trend line but it closed very close to it. Would have preferred a close near the high of the day, but it still beats yesterday.

It still looks like a neutral close, so nothing to do but wait for the weekend to end.

March 2020 Wheat Update 1

Overnight and early morning looked great. You can see the clear break out to the upside. But then price reversed and kept going down further than what would be considered a trend line retest. Price closed very close to my stop, but the candle pattern of today and yesterday is not a sell signal. However, we did close under the 8ema, which is bearish.

I'm not sure what will happen next when the market re-open's 8pm ET tonight or 9:30am ET tomorrow. I see 3 likely scenarios:

1) Open up and continue up.

2) Go down to the 200sma, which is also where the 50sma is, then bounce and start back up. This will probably stop me out, and looks like the most likely scenario.

3) Go down to the 50% Fibonacci retracement, then bounce and start back up.

Of course, anything can happen. If I get stopped out, I'm going to continue to watch it for a bullish entry. Definitely took some heat today but stayed with it because I expected a retest, and this might be just that but got a little carried away.

March 2020 Wheat Bullish Entry (Higher Risk)

I entered long on March Wheat today. I feel like I got in a little early so used a pretty tight stop.

Here are my notes posted on the chart (captured about 9pm ET):

11/20/19 09:54 Mar Wheat.

BB/KC squeeze. (Bollinger Bands inside Keltner Channel)

Bull harami. (candle pattern)

Close above the 8ema.

3ema crossing 8ema.

Above 50sma.

2 previous days high volume.

Recent pull back couldn't reach 50% Fib. (show's strength if price doesn't reverse and touch 50% Fib)

Waiting for touch of 50% Fib would be better.

Down Trend line L could be resistance. 

Waiting for close on down TL breakout would be better.

Mercury going direct today.

Entered 515 1/2.

Target 27.2% Fib ~561.

Stop loss just under current candle 510.

R:R 6:45 extremely good.

Wouldn't be surprised if I get stopped out and price reverses and hits the 50% Fib at 498 1/2. If so, I'll look to get back in long. Let's see what happens.

P.S. See my profile for a link within the blog to an explanation of the indicators on my charts.