Soybean Oil Dec Short - Update 3

We had a close shave today! In fact, it couldn't have been much closer. Our Stop Loss is 33.50 and today's high was 33.46. The fact that we came this close and didn't trigger the Stop helps dampen my paranoia about market makers running every Stop Loss they can find.

We may have gotten some help from the 20sma providing resistance. There's also congestion on the left around  8/27-9/9, but its spread over a large enough price range such that we can't pick a precise level. And of course our Bearish Flag from which we recently broke out to the downside could provide some resistance. But to come this close to hitting our Stop is amazing. Of course, we could easily hit it overnight or tomorrow.

Today's price action resulted in a tight Doji on the Daily chart. It closed over the 8ema. I would have preferred a nice big red candle with a close below the 8ema. But I'd much prefer a Doji (representing indecision between the Bulls and Bears) to hitting the Stop. 

At today's high we had an unrealized paper loss of 33.46 - 31.90 = 1.56 * $600/pt = $936. Ouch. The original pattern that seduced me into entering this short position was so beautiful and textbook that I never thought we'd ever get this close to the Stop.

 It surpassed the previous swing high at 33.41 by just 5 ticks then started down. Perhaps just enough to scare out the Bears and bring in the Bulls before reversing against them. You might say that's paranoia talking, but why do you so often see a slight new high followed by a quick reversal? I don't know the answer but it sure looks suspicious.

The top chart is the Daily and the next chart is the 4 hour chart. Notice on the 4 hour chart we closed just under the 8ema. Not by very much but it does provide some encouragement. You can also see Stochastics are very high. Another helpful circumstance for our short position.

Bottom line is I'm very grateful our Stop wasn't hit and we still have a chance to salvage this trade. This Friday 10/9/20 at 12:00pm ET we have a potentially impactful Grains Report coming out. So we need a big red candle tomorrow, Thursday night, and Friday morning to get as far away from our Stop as possible, to make room for a possible "false" bullish reaction to the report before a significant drop.