Corn looking to rebound; crude looks to rally

Corn (NYBOT:JCN14)

Corn looks to rebound from a rough outing yesterday as grains across the board were relatively weak throughout Thursday’s session. After failing from the 521’4 level, prices began to sell off sharply, eventually finding support at 504’0 overnight. If momentum is going to avoid slipping back into a bearish tone, look for price to hold above the 504’0 in today’s session.

The longer term directional bias remains positive and the recent pullback in prices could offer bullish traders an opportunity to get long from a more favorable entry point. Support levels are fairly well-defined in the July corn with initial support coming at 504’0. Below here, the 496’4 - 497’2 area and the 489’4 – 490’6 area appear to be valid levels of anticipated support in the market. Longer term traders should continue to monitor the Fibonacci Confluence Zone from 481’6 – 483’4. With additional S/R seen at 480’6, traders could consider the range from 480’6 – 483’4 as significant longer term support in the corn market. Near-term momentum is giving mixed signals and price will need to produce a new high above the 521’4 peak in order to confirm bullish momentum in corn.


Corn 30-minute Bar Chart (e-Signal)

 

Crude (NYMEX:CLM14)

Near-term momentum continues to favor the short side in crude despite the recent bounce off a previously mentioned Fibonacci Confluence zone from 98.92 – 99.09. Interestingly enough, price rallied back to the 38.2% (shown as 61.8) retracement at 100.14 and rejected from here in the early morning trade. Is that all for the recent corrective rally in crude? That question remains to be seen; however, bearish momentum and a negative direction bias in crude both point to selling rallies into resistance as the higher probability trade in today’s session. Another level of potential resistance to keep in mind is at 100.50 level.

If price can produce upside follow through above 100.14, look for the 100.50 pivot to be the next relevant level of resistance. Going forward, the previously mentioned fibo c-zone from 98.92 - 99.09 will continue to act as support in the crude market. Below here, there is a S/R pivot at 98.38 as well as an additional Fibonacci Confluence zone from 97.54 – 97.69. If price is indeed going to continue lower, traders should monitor these local support areas as potential downside targets for short positions in crude oil.


Crude Oil 30-minute Bar Chart (e-Signal)

 

But, what about Brent?

About the Author
Erik Tatje

Erik Tatje is currently a market strategist at RJO Futures and is the author of The Tatje Reporta daily technical correspondence. As a member of the Market Technicians Association, he has distinguished himself as a professional in the field of Technical Analysis and currently holds the Chartered Market Technician (CMT) designation. Erik can be reached atetatje@rjofutures.com or 312.373.5176. Learn more at www.rjofutures.com

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