March Wheat did an about-face - Exit

Very difficult decision today at the Wheat market Close.There were reasons to exit and reasons to hold.

The top chart is the Daily chart after the Close. We formed a Bullish Harami candlestick pattern and closed over the 3ema. The 3ema is like a proxy for the 8ema when price is far from the 8ema. Also, we bounced off the previous swing low from mid-December. If we get continuation in the next couple days we will most likely lose all our profit and could feasibly hit our Stop for a loss.

However, we're still under the 8ema, and should therefore hold the position and see what happens tomorrow. Stochastics are low but not very oversold. Also, The BB/KC break out to the downside is just beginning. Not to mention all the Bearish indications that got us into this trade.

So, I zoomed into the 15 minute chart, which is the 2nd chart above, to get more perspective. You can see price is up against resistance from both the 200sma and the 61.8% Fibonacci retracement level. Stochastics are significantly overbought. These suggest price is likely to reject this level and take a dive back down. But it didn't. It didn't break through to the upside either. It just got lodged between the 8ema and the resistance level. Now look at the volume. A huge spike in the last 15 minutes. Since price barely moved in that volume spike, it shows there was a big battle between the bulls and the bears. So the market couldn't decide either, and I wasn't getting any clearer message from the 15 minute chart.

What else could I do to get some insight? I looked at the other grain charts:

The upper chart is the March Corn Daily, and the lower chart is the March Soybean Daily. These looked like they were likely to continue upward for days. Look at Soybeans. It made a new high and closed near the top of the candle!

Looking at these convinced me we needed to exit our Bearish position today, capture what profits we were fortunate to still have, and monitor the March Wheat chart going forward to see if we should re-enter short.

I Tweeted at 13:57 ET:

"I may exit our Short March Wheat Futures position before the 14:20 ET Close today. Watching the 15 minute chart, which is at a critical level."

At 14:11 I Tweeted:

"I'm out of the Short March Wheat Futures position at 770. Details after the Close."

Bottom line:

Shorted: 790 12/29/21

Covered: 770 1/4/22

Profit: 20 points * $10/pt (YW mini-contract) = $200 (Full size would be 20 * $50 = $1,000)