Options play: Are soybeans and corn ready for the next leg down?
As soybeans and corn make fresh new lows, are they poised to continue lower as we head into the harvest?
Fundamentally, as soybeans and corn have reached new contract lows, are they poised to continue lower as we head into the harvest? According to a Bloomberg report yesterday (9-22-14), "Soybean and corn futures extended declines to the lowest in more than four years as harvests accelerated in the U.S., the world's top grower." Yesterday, I spoke to farmers and bankers in Nebraska and Iowa and they both basically had the same news for me. We have bumper crops and prices suck! My guess is that, as of now, fundamentally there really is no bottom in site. That is just my opinion.
Technically, I have added my favorite technical indicators to this chart below. They are the 9- (red line), 20- (green line), and the 50 (blue line) day Simple Moving Averages or SMA's. I have also added Bollinger Bands or BB's (the light blue shaded area) and Candlesticks (the red and green bars with the wicks, on this daily chart each bar represents a day of trading). These few technical indicators tell me 8-10 different characteristics about the market at a quick glance so I have them saved on my charts in MARKETHEAD, so they can populate a chart at the click of a mouse.
What we have here with the November soybeans first and foremost is a market that has gone from a sideways consolidation mode back to a "SUPER-TREND" down. Why you say? Because the 9 day SMA (red line) is still below the 20-day SMA (green line) and they have gone back to pointing lower while the market is trading below the 9 day SMA. Also we have clear cut resistance areas in my technical opinion; first the 9-day SMA, next the 20-day SMA, third the top line of the BB's (light blue shaded area), and finally the 50-day SMA.
I figured this out by pulling up and studying a daily chart with my indicators by the click of a mouse which I found here, which is a web application that we have developed for our clients called MARKETHEAD where I get about 80-85% of all my research from. That means I get both technical and fundamental research from this web app and I am a veteran series 3 Broker of 15 years. So if I'm using it then maybe my readers should check it out. Yes?
November daily soybean chart