Sell the Rip, Buy the Dip?

December Corn

December corn futures nearly tagged our 4-star resistance pocket to a T, with prices just 1/4 of a cent away.  As mentioned in yesterday's report, if you've been Bullish and  long the market, this area was a spot to reduce hedge exposure.  It didn't tag it to a T, but after a 40 cent rally in the matter of a week, many would consider coming within a few cents good enough.  The market then proceeded to pullback and close just below our pivot pocket, 456 3/4-4591/2, which has opened the door for follow through selling pressure down to first support, 450-451 1/2.  So far that is holding with an overnight low of 450 1/4.  If you had sold near resistance (either long liquidation or an outright short position) this would be a spot to consider reducing that or looking back to the long side.  If the market fails to hold ground here, 443 3/4-446 would be the next support pocket to look for.  Finally we seem to be in a more tradable market for traders on both sides of the market.

Technical Levels of Importance (December futures)

• Resistance: 466-469****, 473 1/2-475 1/2***
• Pivot: 456 3/4-459 1/2
• Support: 450-451 1/2***, 443 3/4-446***, 435**

November Soybeans

Soybeans traded the news of Chinese soybean purchases with a classic "buy the rumor, sell the news" reaction.  Making new highs for the move above the psychologically significant 1200 level, but reversing to finish lower on the day.   Though now serious damage was done on the chart, it's important to view the top end of trading ranges as decision points.  As mentioned in yesterday's writeup, " Playing defense against a long physical/paper position from what are basically the highs of the year is not the same as being bearish or short".  First support is holding at 1185 this morning, a failure there and we could see the selling snowball a little further. 

Technical Levels of Importance (November futures)

• Resistance: 1207 1/2**, 1214**, 1225-1230*
• Pivot: 1197 1/4-1199
• Support: 1185***, 1175**, 1166 3/4-1167 3/4****

December Chicago Wheat

Wheat had been the laggard for much of the recent rally, so it's not all surprising that they reversed hard along side corn and soybeans.  Prices came within 1/4 of a cent of 4 star resistance, which we view as important decision points regardless if you're Bullish or Bearish.  Like corn, coming this close was probably close enough after a 50 cent rally in a week.  It reminds me of the old saying; Bulls make money, Bears make money, Pigs get slaughtered.   The retreat carried prices lower overnight, tagging the 20-day moving average to a T at 618.  A retest and failure there could trigger more selling, but for now the hold is constructive and would be on course to mark a higher low. 

Technical Levels of Importance

• Resistance: 642-646 1/2****, 654**
• Pivot: 635 1/2-636
• Support: 618***, 605-609***, 575-577****

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