The grains made minor price movements last. Wheat lost 11 points to close at $5.57, corn slipped 1 ¾ points to close at $3.77 2/8, and soybeans gained 21 points to end the week at $10.01. Trading opportunities have been largely limited to intraday setups. A five-minute chart of March soybeans provided an opportunity to go long on a trend reversal off a monthly low. The trade was triggered by a new high in price which was confirmed by a +DMI Crossover High. ADX rose above the 25 level to show price had gained enough strength to trend upward. Price remained above the 20 EMA (red) throughout the day on Feb. 5, and price gained 50 points. The +ADX rose above 50 (very strong). Trend strength continued into the next morning and then fell in the second half of the day’s session.
Chart Courtesy of TradeStation
Dr. Charles B. Schaap transitioned from health care to wealth care in the nineties. He is the author of ADXcellence —Power Trend Strategies and Invest with Success—Big Profits for Small Investors. Dr. Schaap is a commodity futures strategist and recognized authority in technical analysis of the financial markets. His website is www.adxcellence.com.
