XLE Re-entry - Exit

XLE Daily

XLE 3 minute

At 9:34am ET I Tweeted "Sold our long $XLE #XLE position. Details later.". Here are the details:

We opened gapped down, then filled the gap. Then we started back down, as you can see on the 3 minute chart. I have seen, many, many times, when this price action occurs, you get a continuation to the downside. It seemed very likely that we'd drift back down to the Trend Line and reverse back up.

Since we're using options for this trade, we're losing value daily due to Theta time decay. Plus, options are leveraged instruments, so we'll lose value in our position much faster than the underlying ETF. So, why go for that ride down to the Trend Line, and possibly much further down if we don't bounce off of it. Its better to exit now and wait for the reversal off the the Trend Line. That's why I sold the options.

However, look how we closed on the Daily chart. Today's candle combined with yesterday's forms a Piercing Pattern candlestick pattern. This is a Bullish signal, except its usually actionable when Stochastics are oversold. Currently we're barely out of overbought territory, nowhere near being oversold. 

Still, a Piercing Pattern plus a close above the 8ema, and every other Moving Average we track, as well as the recent Bollinger Bands/Keltner Channel Squeeze Breakout, makes me think it would have been better to wait until the end of the day, as I usually do.

I thought about getting back in long at the end of the day, but its bad to get caught in a sideways thrashing price action. So, I decided being out is probably the best choice. There's still plenty of runway to get back in long if we want to when the setup looks worthwhile.

For now, here's trade result:

XLE Mar 95 Call

Bought at 2.55 1/9/23, sold today 1.64, loss -$91. 

Bought at 1.99 1/9/23, sold today 1.64, loss -$35.

Total -$126/454=-28%.

XLE Re-entry - Update 1

XLE Daily

Looking good today! After bobbling between the downward Trend Line and the 50 SMA for a few days, we gapped up at the Open above the 50 SMA and stayed above it all day. We had decent volume, decent size green candle, and looks like we got a Bollinger Band/Keltner Channel squeeze breakout to the upside. We closed above all Moving Averages and closer to the top of the candle than the bottom. All this is bullish.

Unfortunately, we also entered a previous congestion area to the left, and Stochastics are now in the overbought area. We closed a little stretched above the 3 ema and 8 ema. These provide bearish pressures. It would be reasonable to have a pull back and retest the downward Trend Line.

Strangely, while our energy ETF is looking bullish, the Feb. crude oil futures has a bearish setup. I tweeted 15:47 ET today "Oil Futures Mar 4hr showing tweezer top near 78.6% Fib and a Gartley D point.". Initially, this seems like a contradiction, but we're dealing with apples and oranges. The XLE is an ETF constructed by equities, and the CL futures is the actual crude oil commodity itself. So, its perfectly reasonable that these two will sometimes diverge.

CL Mar Oil Futures 4hr Chart

I decided to hold the XLE long position since it appears the bullish indications beat the bearish ones, and we have now resumed the general upward trend.

(We also shorted the March oil futures, but that's a different trade.)

XLE Re-entry

XLE Daily

See my Jan. 3rd post for our exit from the XLE Bullish trade. On Jan 6th, the previous trading day before today, we gapped up and broke through the downward trend line, then closed slightly above it, after rejecting off the 50sma. Breakouts from triangles usually occur near the apex of the triangle, which is exactly where we are.

Today we confirmed the breakout by gapping up again at the open. The scary looking big red candle today is actually exactly what you want, because when price retraces and retests previous resistance it just broke through, then resumes the breakout direction, that is a strong bullish indication. The fact that we gapped up twice in a row makes the retest even more bullish.

However, while we broke through, gapped up, and retested, we haven't yet resumed the breakout direction. We'll be watching to see if that happens. If we continue downward into the big triangle that formed, our situation will be become uncertain.

But we don't want to exit too quickly because there's another gap just below us. Gaps want to be filled in. So we have to be flexible and patient enough to let that gap be filled and price to reverse back upward. We'll just have to deal with the hand we're dealt.

Also, notice the Bollinger Bands came inside the Keltner Channel, forming a BB/KC Squeeze. Today it looks like we're just about to see a BB/KC Squeeze breakout. If we trend higher and get that BB/KC Breakout, we'll be golden. That should give us typically at least 5-7 candles to the upside.

This triangle we just broke out of is a classic bullish continuation pattern with the expectation to continue the trend it interrupted. However, in my experience, and that of others, triangles can be treacherous. Its not uncommon to breakout one way, then retrace through the triangle and hit the Stops that are likely hiding on the other side. Then the bears will enter short and put their Stops above the triangle. Price action continues a bit to attract the bears, then whipsaw back upward and take out the bear's Stops. You'd think ok, if that happens we can get back in long, but often the price returns to the apex and meanders sideways. When this happens, everyone but the dreaded market makers lose money. No fun.

But a triangle is what we have and no telling whether it'll behave as it should or not. So we have to participate as if the breakout will workout well for us, but be ready for the rug to be pulled out from under us.

At 10:13 am ET this morning I Tweeted "Bought XLE Mar 95 Call for 2.55 when XLE was 88.88 due to breakout.".

At 2:45 pm I Tweeted "Bought another XLE Mar 95 Call for 2.00 while price is testing the down trend line.". It was actually 1.99 but 2.00 just seemed more appropriate for the Tweet.

Normally, you don't want to dollar cost average into a losing position. You want to add to your position when its working, not when its not working. However, my intention wasn't to dollar cost average per se. The price action had stalled right on the trend line, which would normally suggest price is about to reject off support and reverse back up. That's what I expected and if I knew this was going to happen I would have entered there rather than 88.88. So its a perfectly good idea to add to one's bullish position at a level where you have good reason to expect support.

Bullish Jan 2023 Beans

Jan 2023 Soybeans Daily Chart

Went long January Soybeans with a Jan 1450/1460 Call Spread for 5 1/8. Multiplier is $50/pt, so cost was 5 1/8 * $50/pt = $256.25. Today's bean close was 1459 1/2, which means our Call spread is very close to 100% intrinsic value. If the futures price stays over 1460, we'll see the valuation of the option spread widen out from 5 1/8 to 10, which would double our investment. It'll widen out because the time value of the long option will wane as we get closer to expiration on 12/23/2022.

See the yellow annotations on the chart above.

Went long because I see:

• Flag pattern break out.
• Scoop pattern about to break out.
• Bollinger Band/Keltner Channel squeeze about to break out.
• Left/Right Combo candlestick pattern.
• Close above the 8ema, with continuation today.
• High up volume.
• Above all Moving Averages.
• No Grain Reports for at least 1 week.

Soon as the order was filled, which was 14:18 ET, 2 minutes before the grain futures market closed, I entered a sell order for 9 3/4.

The expected bullish move of the Jan Soybean futures price is the D point of the AB=CD pattern (see thick yellow angled lines). D can be calculated from 1406.75 + (1469 - 1366.75) = 1509. This is very close to, but just shy of, the previous swing high of 1512.25.

Summary:

Entry: 1459.

Target: 1509.

Stop: not necessary because our risk is fixed and affordable, thanks to the option spread.

Risk: 256.25

Reward: (9 3/4 - 5 1/8) * 50 = 231.25

R:R = 1:1 which doesn't sound great but expect this a high probability setup.

July Corn Possibly About To Pop - Update 4

We got a gap fill exactly as I've been talking about. In fact it was even better than I planned for because it filled the whole gap. I entered the limit order 2 points shy of the full gap because gaps sometimes "mostly" fill rather than completely fill.

I sent these Tweets this morning as it was happening.

9:52am ET

9:59am

10:10am

By the end of the day, the 5 minute chart looked like this:

July Corn 5 min

Notice how we hugged the bottom of the gap all day once we reached it, even though the world was selling off around us today. Also notice the big bullish volume bar at the very end of the day and we closed above the 8ema, 20sma, and 50sma. There is also a possible Bollinger Band/Keltner Channel breakout pending. These suggest we'll drift upward from here. And like Louise Yamada says "The longer the base, the higher in space".

So, bottom line, we're back in this long trade:

Entered: 785

Stop: 768

Target: 860

Ag Reports Cut the Corn

Yesterday 1/12/22 at 12:00pm ET there was a big set of Agricultural reports released. You can see the reports schedule here:

https://www.usda.gov/media/agency-reports?start_date=1%2F11%2F2022&end_date=01%2F14%2F2022

Here's the list of reports that came out yesterday:

As often is the case, the chart above is quite busy. Please focus on the green text boxes.

The response to the release yesterday was a long legged Doji candle. This represents indecision. My interpretation is the market needed to digest the information longer than the time left before the Close.

I waited until just before the Close today to check today's price action. As you can see on the Daily chart above, we have a very small wick on the top of the candle followed by a relatively large red down candle, and a close near the bottom of the candle. I interpret that to say the market digested the reports and decided it was Bearish. Who am I to argue.

Over the past few weeks, you can see we rejected off a confluence of Fibonacci levels from 4 different ranges. The high was 617 3/4. Then we formed a triangle going into the big reporting day, which makes sense. The resolution is a break out to the downside. Triangles are notoriously unreliable, in that the price can break out one way and quickly reverse and break out to the opposite side. However, given that the break out is in response to the reports a day after the release, I think we can reasonably expect this is the beginning of a down trend.

Also, notice the significant volume yesterday and today. This looks like the market is serious about this price action. 

Notice the triangle pattern led to a Bollinger Bands/Keltner Channel Squeeze. We haven't broke out of the BB/KC yet, but if price continues down we will. If we break out of the BB/KC we can expect 5-7 days of continued momentum to the down side after the break out.

Stochastics are in the mid-range, so we have some runway here before we need to start worrying about being oversold.

OK, let's consider Targets. In the triangle you'll see 2 thick, green, down angled lines. This illustrates an AB=CD pattern. The calculated D point is 578.25. This coincides with a clone of the triangle top trend line that is positioned at the low of the triangle.

Let's look at Fibonacci levels based on the whole up leg since 9/9/2021 with a low of 506 3/4. The top of the up move is the high of the triangle at 617 3/4. A 50% retrace down is 562.25, and the 61.8% retrace is 549.152. The calculations are shown on the chart in green.

There is a 200sma (thick, white, up angled line) which looks like it might be flattening out at 562 1/2.

I like that the 50% retracement (562.25) and the 200sma (562.5) are very close to the same level. So this seems like a good target for now.

I'm going to use a Stop just above the previous swing high within the triangle at 611 1/4.

Just before the Close at 14:13 ET I sold a YC mini-contract for 587 3/4.

Summary:

Entry: 587 3/4

Stop: 612

Target: 563

Risk: 612 - 587.75 = 24.25

Reward: 587.75 - 563 = 24.75

R:R = 1:1 which isn't great, but I consider this to be a high probability trade, which makes it acceptable.

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)

Paypal may be a friend again - Update 11

Today's price action doesn't look like much, but there's something happening here that could be meaningful. Take a good look at today's green candle and the previous trading day's red candle.

Today's candle opened well above the previous candle's close. Then we climbed and closed above the recent congestion. Technically we didn't form a Trend Kicker but we came close to it. We are also approaching the break out level of a Fry Pan Bottom candlestick pattern.

In addition, the Bollinger Bands have pulled inside the Keltner Channel, setting up the possibility of  a BB/KC Squeeze breakout.

These indications, plus Stochastics still in the mid-range, are encouraging to our long thesis.

March Wheat did an about-face - Update 3

Very good day for our short Wheat trade. On the Daily chart above you can see:

• We set a lower high and a lower low.
• We went lower on increased volume.
• You can see the bottom BB has separated lower than than the KC.
• Each of the last 3 candles have bigger bodies, showing an acceleration.
• Stochastics are not yet oversold.

All of the above are constructive for our short thesis. However, we are very close to previous support at 751. Tomorrow will be very important to see if we breeze by the previous swing low, or react to it and get a pop. This made me want to cash out our current profits today, which are relatively attractive. But that could be a big mistake if price continues its cascading drop off.

Another thing that made me want to take profits was Soybeans. Corn continued to look Bearish but Soybeans did a Doji Gap Up off the 8ema on high volume, which is quite Bullish. This gives me concern, but we have to remember while each of these grains are in the same commodity class, they are also different markets.

Just the fact that I'm looking at a nice profit that I don't want to lose is enough pressure to want to exit. But that's to be expected and a trader must be able to deal with that emotion, or they're doomed to keep leaving more money on the table than they should.

So, at the market close, I had to suck up my fears and go with the odds, which is to leave the position on.

However, I think the 729 target might be a little low. The D point of the white AB=CD is 730.50, and the 200sma has risen to 728.93. So, I raised the Target to 732.

March Wheat did an about-face - Update 2

We had a gorgeous day for our short position, even though we had relatively low volume due to it being New Year's Eve day. We closed with a lower high and a lower low than yesterday. We also closed under the previous Support/Resistance level that provided support for the past 2 candles, but not today.

And Stochastics are still in the mid-range while the BB/KC Squeeze is about to break out. Things are looking very constructive as of today's Close.

Corn also closed with bearish indications, which lends some indirect support to a short position in Wheat.

There are only 2 grain related USDA reports due out next week. They are both at 3pm ET on Monday 1/3/2022:

• Fats & Oils: Oilseed Crushings, Production, Consumption and Stocks
• Grain Crushings and Co-Products Production

I'm told by respected Ag trader Richard Anderson that usually neither are market moving reports. So, I'll be holding our position through the news release. You can see the schedule here:

https://www.usda.gov/media/agency-reports?start_date=1%2F3%2F2022&end_date=01%2F07%2F2022

If you noticed in yesterday's post I was also short Soybeans, I covered that position at the close today at 1340. Net is 1364 1/2 - 1340 = 24 1/5 points * $10/pt = $245 in the Soybean trade. The full contract would have been 24.5 * $50/pt = $1,225.

I closed it because:

• I'm over-weighted short grains to hold over the weekend.
• March Soybeans could not close below the 8ema yesterday or today.
• Taking the profit is a hedge against Wheat gapping up at the next market open.

Nothing to do now but wait until next year :)

March Wheat did an about-face - Update 1

We got a nice confirmation of our short thesis on the zoomed in Daily chart above. If you want to see a wider view, look at yesterday's post.

We had a little gap up at the open then formed a Bearish Engulfing candlestick pattern. Stochastics are not yet oversold, but we didn't make a lower low compared to yesterday, and the BB/KC hasn't broken out yet.

We also got some encouragement from the Corn and Soybean daily charts. (I'm also short March Soybeans as of yesterday from 1364 1/2, but I'm not blogging about it because I got in way too early.)

Our short is looking good and I held the position, but I'm not feeling confident yet. It doesn't help that tomorrow is New Year's Eve day, which makes things a little weird, including possible tax related sales by traders and expected light volume.

March Wheat did an about-face

Above is today's Daily chart of March Wheat futures right after the grains market closed. Just before the Close I shorted a YW mini-Futures contract at 790. The mini-contract is $10/pt, while the full size contract is $50/pt.

In the previous Wheat trade on this blog I wanted to go long due to a Gartley pattern. That Bullish pattern has not yet been violated, so this is a bit of a contradictory situation. However, my Target for this Bearish trade is above the X point of the Gartley pattern, so both trades can work.

Here is what I saw that caused me to go short today right before the market Close:

• Head & Shoulders
• Bearish engulfing candlestick pattern
• Continuation by the next candle
• Close below the 8ema, 20sma, and 50sma
• Close below the H&S Neckline
• Possible Bollinger Band/Keltner Channel Squeeze
• Possible AB/CD (light blue angled lines)

However, I also see we had support from a previous Support/Resistance level, and we formed a Bullish Harami candlestick pattern. Today we formed a Doji candle which represents indecision.

We could turn right around and head back up from here to hit the Gartley .618AD Target, and we haven't yet confirmed an AB/CD by dropping lower than the B point at about 750.

So, I don't have a lot of confidence in this Bearish trade yet, but there are enough indications where it makes sense to enter the trade, albeit lightly.

I set the Stop at 801. I picked 801 rather than 800 because 800 is a round number. It's just above the H&S Neckline, 8ema, 20sma, and 50sma. It's a bit of a tight Stop, but this is not yet a high probability setup. And if we break through all that resistance, then the downward momentum that got us where we are can't be very strong. So stopping out early might be a good thing.

I set the Target near the 727.643 78.6% Fibonacci level of the yellow range, which coincides with the 200sma, the measured move of the white AB/CD, and shades the light blue AB/CD and the full measured move of the Head & Shoulders.

Summary:

Entered: 790

Stop: 801

Target: 729

Risk: 801 - 790 = 11 points

Reward: 790 - 729 = 61 points

R:R = 61/11 = 1:5.5 which is ridiculously good.

Dec Wheat Bullish Gartley Re-entry - Update 3

Today we got the "Grain Stocks" report. I discussed this in the previous post and a Tweet I sent out this morning at 8:47am ET:

"Big Grains report named "Grain Stocks" coming out 12:00pm ET. Could move ZC_F Corn, ZS_F  Soybeans, ZW_F Wheat markets. Be careful."

Now that we can see the report had a bullish effect on Wheat, we got back in right before the market close at 14:20 ET. Got a YW Futures mini-contract for 725 3/4.

See the Daily chart above. Again, I apologize for how busy the chart is. Just focus on the yellow annotations.

Notice we have a good size green bar on high volume. Had a little bit if a "Doji gap up" and a kind of a Morning Star pattern, but neither pattern is very well formed. We closed above all Moving Averages and made a new high since the D point swing low. The Bollinger Bands and Keltner Channel are beginning to blossom outward. Stochastics are still innocuous in the mid-range. All this is constructive for completion of our Bullish Gartley pattern. I consider completion to be the .618AD point.

However, you can see today's high is right on the double parallel thin white lines, which represented a gap on a much older trade on a much lower time-frame. But now it also represents the heart of the multi-week congestion. This could cause us trouble by providing some resistance. My expectation though, is to cut right through it.

Continuing with our original target of 744 at the Gartley .618AD retracement on the Daily chart. Using a Stop just under today's Open of 711 1/4, at 710.

Summary of our 3rd trade in this daily Gartley pattern:

Entry: 725 3/4

Stop: 710

Target: 744

Risk: 725 3/4 - 710 = 15 3/4

Reward: 744 - 725 3/4 = 18 1/4

R:R = 18.25/15.75 = 1.16:1, not good but acceptable for this high probability setup.

Fly United to Gartleyville - Update 12

Well, our UAL Aug 50 Call expired today. We bought it for $1.97 on 7/26/21. The chart looks weak, with a break below the triangle and a BB/KC breakout to the downside.

However, the Gartley pattern X point hasn't been violated, so its still a valid pattern. In fact, we haven't even violated the D point. So, I might trade this again to the long side, if we get a reversal.

On 7/26/21 this looked like a very Bullish chart. I don't regret going long. You have to accept not all trades will work. Again, this trade hasn't actually failed yet. It's just taking longer to reach a conclusion than I expected.

Bottom line, the loss is $197.

CRWD Looking Bearish - Update 2

I'm both satisfied and disappointed at the same time. I'm pleased we made a lower low and a lower high than yesterday but would have liked a bigger candle and a close near the bottom of the candle. 

However, we did maintain our volume, Stochastics didn't become oversold, and the Bollinger bands are continuing to widen. So everything is going our way today.

We closed at 232.66, so our 240/235 Put Spread is completely in the money. If we can stay below 235, our spread will be worth the full $5 width at expiration on Friday. 

But if we reach the higher target of 220 with Stochastics oversold and little time left to expiration, I might want to exit at the 220 target rather than waiting for the 210 target and risk an up day that could eat into our profits.

CRWD Looking Bearish - Update 1

Beautiful bearish day. Our Put spread is 240/235, so the maximum value would be 240 - 235 = 5. So in addition to the conditional order to sell the spread when the stock hits 210, I added a limit order of 4.95 for the spread.

If we get a similar size move tomorrow and the next day, then we'll only need 2 more days to hit our target.

CRWD Looking Bearish

Sent a Tweet out 12:06pm ET today that I was shorting CRWD by buying a 8/20/21 240/235 Put Option Spread for about 1.50:

"Shorting CRWD for swing trade. See notes on chart. Details later."

Here's what I noticed today:

• Head & Shoulders with symmetrical timing
• Bearish Engulfing candlestick pattern
• Close below 8ema
• Close below 50sma
• Lower low 2 days ago than the previous swing low
• Bollinger Bands / Keltner Channel breakout
• Blue Ice Failure
• Stochastics mid-range, providing runway to the downside

The chart above is a Daily chart. Some of these observations are obvious and some are not. Let's discuss what needs more explanation. If you have any questions on the rest, please add a comment to this post with your question.

Before we do though, I want to point out I'm a technical trader, not a fundamental trader. So, even if the company is doing well and has a bright future (I have no idea), it doesn't matter to me taking a short term trade. The charts of even the best companies have occasional pull backs. This chart is telling me this stock is about to have one.

The neckline of the Head & Shoulders pattern is very slanted. A horizontal neckline would be ideal. But I've seen plenty of slanted necklines still turn into winning trades. The two thick horizontal line segments at the top show the distance between the head and the tops of the shoulders. Having the same distance from the head to the left shoulder and the head to the right shoulder would be ideal. We have exactly 9 candles to the top of  left shoulder and 9 candles to the top of the right shoulder. Can't get more symmetrical than that. We actually broke through the neckline 2 days ago but I just noticed this chart today.

You can see the Bollinger Bands / Keltner Channel breakout by noticing the light blue squiggly lines have crossed the darker blue squiggly lines from the inside to the outside. This is a strong indicator that whatever the current trend is at the breakout will continue for 5 -7 candles on average. The BB/KC is not 100% accurate, like every other indicator, but I have had good luck with it. Bollinger Band's are a function of Standard Deviation. The Keltner Channel is a function of Average True Range.

"Blue Ice Failure" is a pattern I learned from Steven Bigalow of candlestickforum.com. It means that price breaks through the 50sma, then reverses and tried to cross back over the 50sma but fails to do so, and continues downward. Its too early to tell if we have that pattern, but we certainly do have the beginning of it.

The first target, for me, on a Head & Shoulders pattern is half the projected measured move. But we already hit that the day of the breakout. So, I'm going to name the second target as the "first target", which is the full length of the Head & Shoulders pattern projected measured move. This is about 200.

The next target is the 200sma, which is the thick, white, diagonal, squiggly line. Read my profile to get a link to a description of all my indicators. This is estimated to be about 210, but its impossible to know exactly where the 200sma will be when price gets down to it.

Today at 11:52am ET I bought a 8/20/21 240/235 Put Option Spread for 1.33. If this trade goes as planned, then this spread will be worth 5.00 at expiration this coming Friday.

Summary:

Entry: $133

Target: CRWD = 210

Stop: None needed with an affordable option.

Risk: $133

Reward: $500 - 133 = $367, not including commission.

R:R = 367/133 = 1:2.76, which is very good.

Soybeans and Butterflies - Update 2

Above is an hourly chart after the market Close. We closed above the 8ema, above the 3ema, and a BB/KC Squeeze Breakout has begun. Stochastics still not overbought. All this is bullish for our long trade.

I had an appointment this afternoon and had to leave at 13:15 ET, so I couldn't be at the computer for the market close. I sent out this Tweet at 11:42 ET:

"Can't be here for the Grains market Close today, but expect to continue holding our long position for the November Soybean Futures Butterfly pattern over the weekend, unless of course it hits our break even Stop at 1318 before today's Close."

Fortunately, things went as expected and we're still long.

P.S. "BB/KC" is Bollinger Bands/Keltner Channel. The BB's are thin, squiggly, light blue lines above and below the candles. The KC boundaries look the same but darker blue. The BB's are based on Standard Deviation, while the KC is based on ATR (Average True Range). Notice how the BB's were inside the KC, then between the last candle and the candle before it, the BB's broke out of the KC. That usually indicates there's about to be a big move.