MARKET UPDATE - GRAINS, MEATS, SOFTS
Judy Crawford of Zaner - InsideFutures.com - Mon Apr 16, 3:14PM CDT

MARKET UPDATE
JUDY CRAWFORD
TRADES FOR TUESDAY, APRIL 17, 2018
888-301-8120
jcrawford@zaner.com


EMOTION is your enemy more than any market will ever be.

FEEDERS REVEALING THEIR INTENT? The major bull move that started in 2009 and finally topped in 2014 was historic in extent. Midway through that bull move in 2012 feeders stopped and stalled out. They attempted to recover but then failed both the 10 & 20 avg. on their monthly chart violating the uptrend. Since this is a negative development technically, it would be reasonable to assume the bull move was over with in particular considering how much they had already rallied. Instead in May 2013, they abruptly stopped and took off forming a reversal bottom on their monthly chart. The rest is history. Within a month they were back over both their 10 & 20 avg. on that chart and off and running.

After the 2014 top, a bear market ensued and finally ended in 2016. Since then feeders have rallied, corrected, rallied again and then failed both their 10 & 20 avg. just as they did in 2012/13. The entire correction since the May 2017 high, later recovery and the current selloff is the exact same setup as to what they did in 2012/13 again suggesting a potential top. But, just like they did in May 2013, this month they are forming a reversal bottom. The only difference between this setup and the one in 2012/13 is duration. The reversal bottom was formed after 15 months in the 2012/13 formation that was clearly a fake out as was proven by the reversal bottom. The potential reversal bottom being formed this month is after a top formation of 12 months. It is also interesting to note that the reversal in 2013 occurred in May. We are now in April. Both early in the year.

It is also interesting to note that this recent selloff has been almost a 61.8% fib. retracement of the rally that followed after the 2016 low. And this test of the 2016 low is exactly what feeders did when they made a major bottomed in 2009. They did not start the bull move until they had tested their 2008 low and confirmed it. Are feeders doing the same thing now?

My point being that there are a lot of similarities that warrant paying attention to in the feeder technical world. And one needs to ask if feeders have their own version of fake news and that this negative formation isnt negative after all. If they are setting up the same situation as they did in 2012/13, we could be looking at a bottom and nothing more than a test of that 2016 low before a new bull move.

GRAINS: First they refused to sell off. Then they all started to sell off together to only rally back the next day. Then they sold off again on Friday and had some follow through today. How far this will go remains to be seen. Both beans and meal are on support for now. The selloff should offer a buying opportunity.

MEATS: Hogs are starting to suggest a correction to their first wave up on their daily chart since the April 4 low. It could be a buying opportunity but too early to tell. Feeders and live cattle are suggesting they could retrace some of the recent rally. It should be a buying opportunity.

GOAL OF THE MARKET UPDATE: To give traders a technical explanation of market behavior with the goal to educate and better understand and trade the markets.

What I convey to readers is not a personal opinion but what the markets are suggesting by their technical formations and action.

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GRAINS: Switching to July contracts except for corn until position cleared.

MAY CORN: It sold off to its 20 avg. on its daily chart and held. But if beans continue to sell off I would expect corn to follow. Keep stops at 380. Closed 382 1/2, down 3 3/4.
Position: Long 390 (4.9).
Projection: 450.

JUL WHEAT: After filling its gap, it has continued to sell off and is starting to work into some support on its daily chart. The long term charts are not clear. Watching closely. Closed 479, down 10 1/4.

JUL BEANS: I raised the stop this morning and it was reached. They are holding at their 10 avg. on their daily chart as well as on their weekly chart. Watching closely. Closed 1053 1/4, down 11 3/4.
Position: Long 1070 1/4 (4.12). Exit 1061 1/2 (4.16). Loss $492.50 (including costs).

JUL MEAL: It seems headed for its 20 avg. on its daily chart. It attempted to get back over the 10 avg. and that didnt work so that would be the next lower target. That intersects at 380.00. That is also market support. If it doesnt hold 380.00 (that is also good support on the weekly chart), the probability of meal going lower and possibly filling that gap increases. Just watching. Closed 382.00, down 4.80.

JUL BEAN OIL:
It failed to hold support and made a new low today as it tests the low area formed in May of last year. At that time it sold off to 30.89 before forming a reversal bottom and huge rally. That low is important because that would put into question the long term uptrend it had formed long term since the 2015 low. Just watching. Closed 31.45, down .30.

MEATS:

JUN HOGS: The recent rally is starting to suggest a near term top. After a spectacular recovery on Friday they were down today and formed an inside day on their daily chart. The pressure seems to be coming from the weekly chart where they face both the 100 and 10 avg. that both intersect around 77.70 to 78.00. A 38.2% retracement would have hogs sell off to 75.30 approximately. That is where the 20 & 10 avg. are starting to merge. A 50% retracement would bring them down to 74.25 approximately. Just watching. Closed 76.80, down .85.

JUN CATTLE: They rallied over their 20 avg. today but then backed off. The weekly chart is triggering a preliminary buy this week increasing the potential that a selloff will not be extended. Closed 104.17, up .52.

MAY FEEDERS: I raised the stop to 141.30 and it was reached with a profit. Based on the daily chart this recent rally has a potential projection to 144.00. If they continue to sell off, they will reach the first support at 139.00. Lower support is at 137.00. Watching closely to buy again. Closed 140.37, unchanged.
Position: Long 137.47 (4.12). Exit 141.30 (4.16). Profit $1860 (after costs).

SOFTS: Switching to July contracts.

JUL COTTON: I exited May and rolled over into July. It made a new high today and then sold off. The 10 avg. is now over the 20 avg. on the daily chart. That is the first time since it failed it on March 22. Keep stops at 82.22. Closed 83.22, down .13.
Position: Long 83.72 (4.11). Exit 83.90 (4.16). Profit $35 (including costs).
Position: Long 83.75 (4.16).
Projection: 87.00.

JUL ORANGE JUICE: Yesterday I said it was close to confirming a bottom if it could take out 142.00. That was in reference to the May contract. For the July contract it needed to take out 142.20 and did so today. The current high is 143.60. This confirms a second wave up and it reached its potential projection today. If there is a setback it could be an opportunity to buy. Just watching. Closed 143.30, up 2.20.

JUL COFFEE: Last time the downtrend remained intact and it still does. Another new low in coffee today at 116.45. Its last low was in June 2017 at 113.00 for the July contract on both the monthly and weekly charts. Next support is at approximately 115.00 long term and it sure looks headed for that. If it doesnt hold there, it will probably reach for that 113.00. Just watching. Closed 116.55, down 2.95.

JUL COCOA: Another new high today at 27.14 and it finally bumped up against its 100 avg. on its monthly chart at approximately 27.00. It also has market resistance there that was formed in 2015. The potential head & shoulders top on the daily chart was quickly negated today. On the weekly chart todays action put it over the 200 avg. Since it is giving no indication of a top, best to just watch. Closed 27.04, up 1.28.

JUL SUGAR: Another attempt at its 10 avg. that failed today. It actually got over it but was stopped by the market resistance at 12.40 - that level was support until it failed it last week. The downtrend clearly has the upper hand. One positive, possibly, is that it has reached the 12.00 support long term and it is attempting to hold. It did hold that support on a closing basis in 2015 for over half a year but during the month it would trade under it. My point being, if sugar does hold 12.00 this time around, do not be surprised if it goes under that level temporarily as it did in 2015. Just watching. Closed 12.17, down .03.

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