CommodityTrends Weekly Newsletter

In Mar Rough Rice, the #1 bottom was set at 9.560 on December 18. The #2 point formed at 10.320 on December 26, and the #3 point came in at 9.635 on January 2. Price moved higher on the confirmation candle on January 5, so there was no early entry.

After that move, price made a high on January 6 and then pulled back. A break above that high (green horizontal line) would trigger an MET long entry. If the trade is filled, the stop could be placed just below the recent lows, or below the blue daily or gold weekly support lines, depending on how much risk you are comfortable taking. The first upside target is the blue resistance line at 11.000. 

Mar Wheat has established a new #1 bottom at 501-4, set on January 2. The current #2 point stands at 522-6, marked by the January 8 high. This #2 level remains valid unless price trades above it today. Should that occur, I’ll look for a new #2 point to form. Continue monitoring price action as the remaining 1-2-3 strategy conditions develop.

Mar 30-Year T-Bond is moving sideways inside a channel. I’m watching closely for a breakout. If a breakout happens, I may look to enter a trade in the direction of the move if price pulls back to the breakout level. For now, I’m still waiting and watching.

Earlier, I wrote that Feb Live Cattle was moving sideways inside a clear trading channel. Because the move before the channel was higher, a breakout above the top of the channel would signal a possible long trade. If triggered, a stop could be placed just below the recent channel lows. The first upside target was the lower edge of the weekly resistance zone (gold rectangle).

This setup triggered a long entry on January 2. Price moved about halfway to the target before pulling back. The original stop is below the bottom of the channel. To lower risk, the stop could be raised to just below the lower blue horizontal line at 230.650. 

For Mar Cotton #2, the #1 bottom point is at 62.97 (the low on Dec. 16). The new #2 point is 65.76 (the high on Jan. 06). Keep watching for all of the 1-2-3 strategy criteria to be met.

Mar Sugar #11 formed a #1 bottom at 14.04 on November 6. The #2 point followed at 15.29 on November 28, and the #3 point was set at 14.38 on December 18.

A few weeks ago, I explained that a long trade could be triggered if price moved above the December 19 high. That breakout happened on December 22. At the time, a logical stop could have been placed just below the #3 point, with an upside target near the daily chart resistance at 16.33 (blue line).

Since then, price has started moving sideways inside a channel. Even though the original 1-2-3 pattern is still there, the sideways movement changes the setup. Because of this, I would consider closing the position and then wait for a new trade opportunity on a clear breakout of the blue channel.