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CME CBOT:ZL Soybean Oil : BUY the Dip, Target : 41.58 (+33.27%)Soybean Oil Futures (CME CBOT: ZL) : Trade : BUY the Dip Entry : 31.2 Target : 41.58 (+33.27%) Stop : 28.53 (-8.56%) Note: Soybeans futures are showing menaingful movement. I think it's time to pay attention to soybean oil futures. Key price is 34.16. When they secure that price line, it will be a sign that they are out of the bottom and will rise one notch higher. Important prices are 28.53, 34.16 and 41.58. If the market is strong enough, they could rise up to 52.80. As 34.16 is a strong resistance, they will fluctuate soon. There will be opportunities to buy at a lower price.
CBOT:ZL1!Long
by Ptrade
1
Market Update – 25/10/20 | FCPO, Sb, Sbo Oil, FX & OtheWeekend Market Updates & Analysis 25 Oct 2020 Note: If you would like to receive this the latest updates immediately without 3 days release, please search for my site Palm Analysis. Recap 1) Let’s start the report with a review of last week’s update and market conditions. You can read last week’s report by clicking here: Weekend Market Update – 18 Oct 2020 | FCPO, Soybean, Soybean Oil, Currencies and Others FCPO i. On Point 19, 20 i and ii, 30 ii and iia, I said that both the bulls and bears have credible setup, which is classic trading range price action, and bears will likely try to push the market lower, and should the bears fail to resume their second leg down the bull will assume their case has more merits and will buy the pullback for a second leg up to retest the highs of the trading range. ii. We did see a very strong sell off on Monday, which failed the following day and bulls came back for the second leg up. Soybean iii. On Point 6 and 7, I said that Soybean is still in a tight bull channel with strong buying pressure and we will likely see another leg up to form the 3rd leg up for a wedge pattern and a final bull flag. iv. On Point 30 iii, I said that I was monitoring if we see another leg up to complete the 3rd leg of the wedge pattern to retest the 1080-1100 top of the trading range. So far we got that. Soybean Oil v. On Point 10 i, I said we will likely see bears attempt to push below the low of last week and we got that on Monday. I also said that both the bulls and the bears have credible setup, which is classic trading range price action. vi. On Point 30 iv, I said that I would be monitoring whether the sell of last week was merely just a 2 legged pullback, before the second leg up in Oct resumes and we got that. Dollar Index vii. On Point 30 i, I was monitoring if Dollar have another small leg down to create a double bottom at 93 before rallying – (if it rallies at all). viii. We got that and Dollar fell further than 93 to close at 92.767. ix. Take note that on my 4th Oct 20 report that you can read here (4 Oct Report), On Point 43 i and ii, I said “that sometimes the 3rd leg up can be very inconspicuous and may just be a 1 bar up and when that happens, the market will likely conclude that this bounce from Sept is likely just a bear rally, and will sell the bounce for a 3rd leg down to test 92 area (recent lows) and then 88-90 area.” x. So far in the DXY, instead of a 1 bar, we got a 3 bar bounce on the 13th to the 15th, and price started to sell off to the 92 area after that. What’s up ahead? Soybean Monthly 2) So far, the monthly bar is a strong bull bar trading near its high at the 1080-1100 top of the multi year trading range. i. There are 5 more trading days next week, and the bulls wants the bar to close as high as possible, while the bears wants the bar to close below the middle of the bar to reduce the bullishness. ii. Currently we are looking at 3 strong bull bars on the monthly chart, and a tight bull channel which started in May/Jun period. Soybean Weekly 3) So far on the weekly chart, the week closed as a bull bar closing near its high with a small tail above, and closed near the top of the multi year trading range of 1080-1100. i. As I said in my report last week, we are likely looking at a wedge pattern forming, and the current bar has formed the 3rd leg up by breaking above last week’s high. ii. By closing on its high, I think we are likely to see slightly higher prices next week. iii. Secondly, looking at the range of the first leg up and the second leg, I think its likely we will see at least another bar up on the weekly chart too. iii. The bulls wants to close strongly above the 1080-1100 range next week, while the bears wants the breakout to fail, and for prices to close back below the 1080-1100 range for a 2 legged pullback after a wedge pattern. Daily Soybean 4) So far on the daily chart, price is still trading in a fairly tight bull micro channel. i. The only noticeable selling pressure is the sell off at the end of Sept, and the 12 Oct 1 day pullback. Other than that, there hasn’t been much selling pressure and no strong consecutive bear bars. ii. Price traded below the low of the prior day on the 22 Oct, but found more buyers instead of sellers which was expected in such a bullish market. 5) I think we should continue to see slightly higher prices in Soybean as price moves up to complete the wedge pattern and then a pullback after that. i. We also have to look at the Dollar and other factors which we will cover below. Soybean Oil Monthly 6) So far on the monthly chart, the bulls have been able to push higher after a failed break below Sept’s low earlier in the month. i. We are approaching the final trading week of the month. The bulls wants the bar to close near the high and above the middle, while the bears on the other hand wants the price to close below the middle of the bar and as low as possible. ii. Bulls are looking for a re-test of the recent highs and multi year top of the trading range around 35.50-36 area, and close strongly above it. iii. The bears on the other hand are looking for prices to fail and close lower for the month. ii. We will have to monitor how the monthly bar closes next week. Soybean Oil Weekly 7) The weekly bar closed as a strong bull bar closing near its high with a prominent tail below which makes it likely we will see at least slightly higher prices next week. i. This week started off by the bears selling below the low of last week, which failed and traded back up to close the week strongly. ii. The bulls see the second leg up case has more merits at this point. iii. Taking a measured move up of the first leg, the bulls would probably have a target around 35.25, which is very near to the multi year top of the trading range 35.50-36 area. 8) I’m slightly more favorable to the bull’s case for a second leg up and will be monitoring if they get their target of 35.25 next week. i. While I’m slightly favoring the bull’s case, I want to also be alert to any possible failed breakout – meaning price breaks above this week’s high and then trade back lower and form a reversal bar. ii. This would then form a double top setup with the Sept high for the bears. Soybean Oil Daily 9) The bears tried to form the second leg down on Monday and failed, and prices reversed up higher. i. I think its fair to say traders will be looking if the second leg up to 35.25 form as expected. If it forms, then its within expectations. If it fails, then it says a lot about the lack of strength of the buyers. ii. With the buying pressure stronger than the selling pressure, I’m slightly more favorable to the bull’s case at this moment. Dalian Palm Olein Monthly 10) So far on the Dalian Palm Olein, the monthly chart has a moderate bull body with tails on top and below the bar. i. 5 more trading days to go next week until the monthly bar closes. ii. The bulls wants the bar to close near the high of the bar, while the bears wants the bar to close below the middle as low as possible. iii. Currently on the monthly chart, price is still trading in a tight bull channel, which is a sign of strength. We will have to see how the monthly bar closes next week. Dalian Palm Olein Weekly 11) On the weekly chart, last week closed as a big doji bar, around the same area as the week before that. i. We can see prices consolidating in a large trading range near the high of the multi year trading range between 6500 and 5700. ii. In a trading range, traders buy low and sell high, and; iii. When prices are in a trading range, traders reverse from buying to selling every few days, and credible setup tends to disappoint both the bull and bears. iv. The production for CPO is lower this month so logically, we should see higher prices for Palm Olein too. v. If we do not see this happen, this is a potential red flag for next week. Something to watch out for. Dalian Palm Olein Daily 12) On the daily chart, after the strong move up, price seems to be forming a triangle pattern since the sell off at the end of Sept. i. Last week, the bears attempted to resume the second leg lower on Monday and failed, and price has since reversed up. ii. Traders now expect to see the second leg up from the 30 Sept to 15 Oct first leg form. iii. If it forms and re-test close to the recent highs fo 6500, then it is within expectations, but; iv. If it fails to form, that would tell us a lot about the lack of strength of the buyers. FCPO Monthly 13) So far the monthly bar had a bull body which followed a failed breakout below Sept’s low with a tail above. i. There are only 4 more trading days in the month due to the Birthday of Prophet Muhammad holiday next week. ii. The bulls wants the monthly bar to close near the highs, while the bears wants the monthly bar to close below the middle of the bar. 14) So far, prices has been in a 2 month’s trading range between 3100-2680, consolidating near the highs of the multi year trading range. i. In trading ranges, traders sell the highs and buy the lows. ii. So I will be monitoring if we see selling come in again as we approach the highs closer to 3100. Weekly FCPO 14) The weekly bar closed as a bull bar near the highs with a prominent tail below. i. The bears attempted to resume the second leg lower on Monday and failed and prices reversed up. ii. Currently, it looks like the bull’s case for a second leg up to a measured move around 3100 has slightly more merit. iii. If price reach there, buyers will then want price to break above the top of the multi year trading range of 3150-3200. iv. The bears on the other hand wants prices to fail near the top of the trading range for a Double Top with retest with the Sept highs. 15) With last week’s failed bear breakdown, and this week closing near the highs, we should see slightly higher prices next week. i. I see a potential measured move to re-test the Sept highs around 3080-3100 on the weekly chart and will be monitoring if we get this next week. Daily FCPO 16) On the daily chart, after the failed breakdown on Monday, we are now looking at the second leg up from the Oct 5 to Oct 13 first leg up forming. i. This current leg up is more choppy with more overlapping bars as compared with the first leg. That tells me that the conviction of the bulls are maybe not as strong as the first leg. ii. I see a minor second measured move up within the second leg with a target around 3050. iii. Take note that the first leg high stopped around 3020, and the weekly measured move up is around 3080-3100. iv. With so much measured target above, and prices trading near multi year trading range highs, I will be monitoring if we start to meet into some headwinds for prices. Just something to watch out for, especially if Dollar starts to strengthen next week. Other issues effecting Palm Oil 17) i. Production should be coming in lower for the month between 5% – 10% for the whole of Malaysia ii. Exports so far looks not bad. Even if it is slightly higher or lower than Sept, you have to remember Sept was up 12-13% against Aug. iii. So far no rain and no floods. iv. News in the media talked about emergency measure by the Govt, but I expect palm industry to operate as per normal except Sabah side. Let’s look at the currencies. Dollar Index – DXY 18) So far for the Dollar Index, price traded lower as I suspected it would, and broke below the 93 level. i. So far, I still do not see it as super bearish, but probably a 2 legged pullback from the Sept 2 legged up move. ii. What this means is that, we might still see a few more days lower for Dollar next week, but I will be monitoring if this 92-91.50 area holds. iii. If it does, and price start reversing up after testing lower for a few more days, this is bad news for commodities like SB/SBO/Palm. iv. What if 92-91.50 area fail to hold and prices continue to break down lower to 88-89 area? Then this would be supportive for SB/SBO/Palm prices. USD/Chinese Yuan 19) The RMB strengthened against the Dollar earlier in the week and gave back most of it gains. i. I would prefer to see the RMB continue to strengthen against the USD, but things are looking a bit overdone. ii. I would be monitoring if we have a weakening of the RMB against the USD next week as this would not be good for commodities prices. Indian Rupee/USD 20) The Indian Rupee also weakened against the USD last week and that’s not so favorable for palm purchase. i. The INR weakened against the USD by 0.8% for the week. Luckily, MYR also weakened against the USD by 0.48% which offsets the weakness in INR by half. ii. I would prefer to see a stronger INR against the USD and if this trend of weakening continues, it would be concerning to me. USD/MYR 21) As I have said above, it was good that MYR also weakened slightly against the USD, which offsets the weaker Indian Rupee. i. As an exporter nation, we want our buyers (Importing nations – China, India, Europe, Others) to have stronger currencies against a weaker local currency (MYR) ii. If the our importing nation’s currency weakens, preferably, I would like to see ours weaken as much or more to offsets the price differentials. iii. Otherwise, if the differentials grow too large, it might have an adverse effect on commodities purchases. Other Factors to look at: Crude Oil 22) Crude Oil traded lower last week. i. In my past reports, I have said that I would have preferred to see higher crude oil prices as it reflects the health of the global economy. ii. Higher crude oil prices indicate more cars on the road, more flying and more energy usage by industry for production. iii. With the increasing Covid cases especially in the USA and Europe, this is starting to dampen the prices of crude oil as the expected demand drops due to lock downs and restrictions to business activities. iv. If crude continues to trend lower, this would be a worrying trend for overall economic activities. Other, Other Factors to look at: Covid-19 23) USA just recorded a record amount of daily cases, almost 90k per day. i. Remember we had a state election in Sabah and cases went haywire in Malaysia? ii. Well, USA will be having a national election on the 3rd of Nov, and early election already in the process. I highly suspect this is going to drive up cases going into the fall/winter months – in line with what the experts have been warning us about. iii. Cases in France, Spain and other EU countries are also ticking up with potential lock down in the UK. iv. If cases continue to spike at an accelerating pace, we may see countries resort back to drastic measures like lock down once again and when that happens, it may also effect demand for Palm. v. Can you imagine USA daily cases spike to 200k cases a day or more? Even if Biden wins, we might see a few weeks of lock down just for them to flatten the curve. vi. Just something to watch out for. USA Elections 24) I think we should also keep in mind of the USA election on the 3 Nov. i. We may see a large move by the Dollar due to the election. ii. If the Dollar spikes lower due to more stimulus expectation, then that’s fine, as that is supportive for commodities prices. iii. But Dollar also has a tendency to strengthen like it did after Donald Trump won in 2016. That would be bad for commodities prices. 25) Why is this important? i. Because we do not know how traders globally are positioning or whether they are hedging their positions. ii. Would traders de-leverage and reduce their long positions in commodities prior to the election? or; iii. Would they just hedge it? iv. I honestly don’t know. But it is something we need to be aware off and to monitor if players in the industry start de-leveraging and reduce their positions ahead of the election less than 10 days from now. Summary 26) I have covered a lot above, I suggest you to go through each of the section of the different products to get a better picture of what I am looking at because I’m afraid this summary may not do it justice or provide you with the clarity of my thoughts. i. Soybean – I expect slightly higher prices for Soybean and will be monitoring if we get it. ii. Soybean Oil – I am slightly favoring the bull’s case, but I also want to be alert to any potential failed break up or failed measured move up in SBO next week. iii. FCPO – with production still tight, and rival commodities still strong, I also expect slightly higher prices next week to around 3020-3080-3100 area. Should we get there, good – within expectations. If we failed to get there? I would start to be careful because that means the sellers are potentially coming out to sell near the highs of the multi year trading near 3100. iiia. If we do get to the measured target above, traders will then be looking if market can spike even higher, maybe towards the 3150-3200. I will take it 1 step at a time. Reach the targets first, then look at how the currencies are behaving and how the rival commodities are doing. iv. Dollar (DXY) – the USD look weak, but it could potentially only be a 2 legged pull back only. That means, we might still see a few more days of down move. After that, I will be monitoring closely if we suddenly have a strong reversal up in DXY – if this happens, this is bad for commodities prices. v. RMB – The Chinese Yuan continue to strengthen against the USD, but I feel like it is a bit overdone. I will be monitoring if there is a bounce there and RMB weaken slightly against the USD. If this happens, we might see some pullback in commodities prices especially the Soybean, Corn, Wheat products. vi. INR – The Indian Rupee weakened against the USD, which is offset slightly by a weakening MYR/USD too. I would prefer to see a stronger INR. I will be monitoring accordingly. vii. Important note – should prices move higher within expectation, I would want to be on the lookout for sudden strengthening of the Dollar which might cause prices to fall. So far that’s all to this week’s report. If there are any major changes, I will update again accordingly. Till next week. Best Regards and trade safe. Tech Trader
MYX:FCPO1!
by Tech_Trader88
Weekend Update – 18 Oct 20 | FCPO, Soybean, Soybean Oil, FXWeekend Market Update – 18 Oct 2020 | FCPO, Soybean, Soybean Oil, Currencies and Others Take note that the updates here are 2 days late. If you would like the latest updates, please visit palmanalysis dot com Review Let’s start the report with a review of the past 2 weeks. 1) In my last update on the 4th Oct, I expected: On Soybean i. On Point 13 ii, I favored slightly higher Soybean prices due to the relative strength, and we did see higher prices in the 3rd week of Oct, and prices had a pullback last week. On Soybean Oil ii. On Point 46 ii, for Soybean oil to complete its second leg down and if the support at 31-29 holds and to see the strength in the subsequent bounce iia. Price found support at 31.50 and had a good bounce. It then had a slight pullback last week. On FCPO iii. On Point 46 iii, To see FCPO 2 legged pullback to 2800-2650-00, and then a re-test higher, and would want to see if the re-test of the highs is strong or weak . iiia. Price found support at 2690, and the first leg of the re-test was quite strong going back up to 3000 by the 12/13th of Oct. It has pulled back slightly since then. On RMB and INR iv. On Point 46 iv, I want to see RMB and INR strengthen – We have that in RMB but INR is Flat On Dollar Index v. I expected the Dollar Index to find support around 93-93.50 – Price found support at 93 and had a bounce last week. You can refer to the Weekend Updates – 4 Oct 2020 | CPO, Soybean, Soybean Oil & Currencies here. What’s up ahead? Soybean Monthly 2) In my last update On Point 6, I said that price would attempt to break above the highs of Sept and test the top of the trading range around 1080-1100. i. Price tested very close with a high in Oct at 1079. Price has pulled back since and price is currently trading in the middle of the month’s range with another half a month to go. 3. i. Bears wants price to close below the middle of the month or as low as possible and to have a candle with a bear body. ii. Bull on the other hand wants a strong retest of the 1080-1100 top of the multiyear trading range and break strongly above it to test the highs of 2016 around 1170-1200. Let’s look at the weekly chart. Soybean Weekly 4) So far prices is still in a tight bull channel which is strength in the buyers. i. It looks to me that we are forming a spike and channel bull trend, and in the process of forming a wedge push up – with second Oct week push being the second push up in the wedge. ii. If this is true, we could see another push up in the next 1-2 weeks – the bulls wants a strong close above the 1080 top of the multiyear trading range; iii. The bears on the other hand wants price to fail at the top of the trading range and reverse down instead. iv. The current bar is a bear bar but with a big tail below, which is a weak sell signal bar. If price trade below last week’s low, we may see more buyers than sellers below. 5) I do feel the overall global picture is a bit murky at this moment due the the following factors i. If we have dollar start strengthening in the next 1-2 weeks, it is generally bad for equities and commodities. ii. However we have to take note that in Sept, the Dollar strengthened and equities fell, but Soybean bucked the trend and went up instead, which is showing relative strength. The story behind the up move was strong demand from China. iii. So we have to monitor whether a) Dollar continue to strengthen or weaken (weaken is good for commodities like Soybean/ Soybean Oil / Palm) or Strengthen, and b) if strengthen, will Soybean follow into weakness or buck the trend yet again like Sept? 6) For now, as price is still in a tight bull channel, I suspect we may see a little bit more pull back, and then a 3rd leg up to form for the wedge pattern. Daily Soybean 7) On the Daily chart, we see price consolidating in a small sideways trading range between 1030-1080 in the last 1 and half week. i. This potentially sets up a final bull flag – which if true, means there should be another small sideways to up leg from here. 8) We do see some bear bar, but no significant selling pressure as there were no consecutive bear bears since Oct started. i. We will have to monitor on this point to see if selling pressure develops next week. Soybean Oil Monthly 9) So far Oct is the first pullback following a 5 month micro bull channel. The monthly chart so far is a doji bar which means the bulls and bears are currently in balance around these prices. i. Notice last month was also a doji bar which means balance around these prices of 32.70-33.30 range. ii. The bulls wants the monthly bar to close above the middle of the bar, as high as possible, while the bear on the other hand wants prices to close below the middle of the bar and as low as possible. iii. With 2 more weeks to go, the bars can look very different by the end of the month. Soybean Oil Weekly 10. Last week closed as a bear bar, which is a sell signal bar for the bears. i. I think it is fair to say we will see bears attempt to push prices below the low of last week to attempt the second leg down for Soybean Oil which started in Sept. Will they succeed? We have to look at a few other factors such as: ia. The Dollar 1b. How strong soybean is holding up ii. If the bears get their way, we may see SBO test back the 31.50. iii. The bulls on the other hand wants to see the breakout below last week’s low to fail, and then reverse up for a second leg up which started in the second week of Oct. Soybean Oil Daily 11) So far on the daily chart, it looks to me that the whole of last week was a 2 legged pullback against the stronger 2 legged bull leg which started in Oct 5 to Oct 9. i. Price is currently consolidating around the 20ema area, which is the average price traders are looking at. Notice that the bounce during the end of Sept also tested this area of 33. 12) Both the bulls and bears look like they each have credible setup. i. The bears have a double top second leg down sell setup, while; ii. The bulls have a second leg up from the Oct 5-9 bull leg. iii. With credible setup for both the bulls and bears, this is classic indication for trading range price action. Neither the bulls nor the bears have a strong edge at the moment. iv. We will have to look at other factors to give us slightly more information which we will cover below. Dalian Palm Olein Monthly 13) On the Dalian Palm Olein Chart, so far the monthly chart, price is trading near the lows after gaping up after the long holiday break. i. Price has a prominent tail above, which also indicates profit taking towards the higher prices traded. Notice last month also had a prominent tail above. It indicates that prices are finding sellers near the high of the multiyear trading range. ii. With 2 weeks to go, the monthly chart could still look very different from now. iii. The bears wants price to trade lower and for prices to close with a bear body and a big tail above. That would setup a strong sell for Nov. iv. Then bulls on the other hand wants the trend which started in May to continue as price is still trading in a bull micro channel. Let’s look at the weekly chart. Dalian Palm Olein Weekly 14) Last week closed as a doji looking bar with a small bear body with prominent tails above and below the bar. i. So far, the bull channel is quite tight, but prices are trading near the top of the multi year trading range. ii. Price is currently trading near in the middle of the 4-5 weeks sideways trading range which is a sign of balance. iii. When prices are in a trading range, traders reverse from buying to selling every few days, and credible setup tends to disappoint both the bull and bears. Not much clarity on the weekly chart too. Let’s see what’s up on the Daily Chart. Dalian Palm Olein Daily 15) On the daily chart, last Friday traded lower, then back up and closed the day with a prominent tail below. i. The bulls will be asking if this is the pullback from the Oct leg up, which will be followed by another leg up? ii. While the bears on the other hand are asking if this is the continuation down for the second leg which started at 22 Sept? 16) I think we need another few more days price action to have more clarity on this. i. Should price trade back up from here, traders will assume that the sell off from last week was simply a pullback which will be followed with a second leg up. ii. If price continue to trade lower, then traders will assume that the second leg down from the Sept sell off is resuming. 17) With both a credible buy and sell setup, this is classic trading range price action – the price action disappoint the bulls and bears every few days. i. I am slightly more leaning towards the bullish case due to the lower palm production this month. Not much clarity here either. Let’s look at FCPO below. FCPO Monthly 18) So far on the monthly chart, Oct traded below the low of Sept early in the month and found buyers there. i. Price is still trading above its middle of the bar, and has a bull body with a tail above. Currently price still slightly favors the bulls. ii. With 2 more weeks to go, the bar could look very different by the end of the month. iii. Price still remained in a tight bull channel for now which is a sign of strength for the buyers. Weekly FCPO 19) Price closed this week as a bear bar, which is a sell signal bar for next week. i. The bears are looking at last week’s bear bar as the sell signal bar for a second leg down from a double top with Sept’s high. ii. The bulls on the other hand sees last week’s pullback as the pullback for a second leg up. iii. Both the bulls and the bears have a credible setup, which is classic trading range price action. Daily FCPO 20) Price closed as a small bull bar with a prominent tail above. i. The bears see the 15 Oct sell of as the start of the second leg down from the end of Sept sell off. Another few more day’s price action should give us the clarity we need to see if this second leg fails. ii. The bulls on the other hand sees last week’s sell of as the pullback from the strong Oct 5 to Oct 12 leg up, and should the bears fail to resume their second leg down next week, the bull will assume their case has more merits and will buy the pullback for a second leg up to retest the highs of the trading range. Other issues effecting Palm Oil. 21 i. Production trend looks like it is heading lower this month between the range of -5% to -10% or more. This is a bullish factor for the bulls. ii. Exports for the first 15 days shows slightly down -2% to -3% against Sept, but you have to remember, Sept was up 12-13% against Aug. This means, the exports for Oct is not that bad if compared to Aug levels, just slightly lower than last month. iii. So far, no significant rain nor flood effecting palm. Let’s look at the currencies. Dollar Index – DXY 22) So far the Dollar continued its pullback to 93-93.50 as we have expected. It then bounce last week, trading slightly above 93.50. i. As I have said previously, a strong dollar is bad for commodities such as SB, SBO, Palm. ii. Price is currently trading at the bear trend line and I will be monitoring if there is another leg down to test 93 again, before we have a big strong bounce up to 95-96 area, or, iii. If prices continue to trade up from here. Remember, a strong Dollar is bad for SB, SBO, Palm. 23) In my last update on Point 47) I wrote that – is it possible where we see the Dollar Index strengthen but Palm prices still holds and not drop much? Answer is yes, its possible. Why? i. What if production levels drops off significantly? This is good for bulls. ii. What if it starts to rain at any moment, we see severe flooding in ffb production states and disrupts harvest? This is good for bulls. (though there are no signs of this right now) iii. What if exports figures are good? This is good for bulls. (So far exports are slightly lower than Sept, but still much higher than Aug) iv. What if the Dollar index strengthen against other currencies, but remains weak against RMB and INR? This is also good for SB/SBO/Palm. iv. So a strengthening Dollar Index does not necessarily equals lower Palm Prices. We need to see it in relation to the RMB, INR, local productions, demand and related factors. So I will be monitoring the Dollar in conjunction with Point 23 above. USD/Chinese Yuan 24) Happy note for Chinese Soybean buyers. The RMB continues to strengthen against the Dollar. This is supportive for Soybean purchases. i. I would like to see the RMB continue to strengthen or at least stays flat and not weaken against the USD. Indian Rupee/USD 25) The Indian rupee mostly traded sideways – flat. i. I would like to see an INR that is strengthening or at least flat and not weakening against the USD. USD/MYR 26) The Ringgit was mostly flat in the month of Oct, it strengthened very slightly. i. I would like to see a Ringgit that is weakening or at least stays flat against the Dollar. ii. If the Ringgit is strengthening against the Dollar, then I would like to see the RMB & INR also strengthening as much or more relatively. Other Factors to look at: Crude Oil 27) In my last update, I said that I would like to see Crude start ticking higher after testing support around 36 – 34 area. i. Price held around the 36.60 area and didn’t trade lower and bounce from there. ii. Price is trading around the 41 area which is the high of the recent trading range area. iii. Price attempted to sell off 2 times on last Thurs and Friday, but reversed back up, with large prominent tail below. 28) I would like to see crude continue to trade higher as it indicates a stronger overall world economic conditions – more cars on the road, more flying, more energy usage for economic output. A weaker crude oil is generally not supportive for commodities prices such as SBO and Palm. Other, Other Factors to look at: 28) There is a presidential election in the USA in the 3rd Nov. i. We have to keep this date in mind because it could move the Dollar in either direction which will effect commodities prices. 28a. On Covid Cases. i. The western world in heading into the fall/winter months which experts believe Covid cases will increase due to people spending more time indoors. ii. We are already seeing spikes in cases in France, Spain and other countries. iii. Remember we had a state election in Sabah, and cases in Malaysia just boomed? iv. Well, the USA election is on the 3rd Nov. What if it happened like Sabah, and the election in USA caused cases to spike uncontrollably to 100k to 200k or more daily cases? Something to watch out for. Summary 29) So far from the charts, this week, prices are much more murky and unclear than previous few weeks. i. There are credible buy and sell setup for the bulls and bears, with each not having a large edge against the other. ii. This is classic trading range price action – in trading range, people sell high, and buy low of the trading ranges. iii. The currencies offer slightly better picture because RMB is strengthening against the USD, and we will monitor if this will support SB prices next week. iiia. We have to also monitor if RMB can continue to maintain these levels or if it weakens back against the USD. A weakening RMB I think will not be supportive of Soybean Prices. iv. Not much to see from Indian Rupee as it has been trading Flat against the USD – just slightly higher v. Ringgit strengthen slightly against the USD also – I prefer to see a weaker Ringgit in the next 1-2 weeks. 30) What I am monitoring: i. If Dollar have another small leg down to create a double bottom at 93 before rallying – (if it rallies at all) ii. FCPO – Whether the selling price action from last week was merely just a pullback before a second leg up. iia. With production being so tight, there is a chance of this happening – even against a strengthening dollar. iii. Soybean – If we see another leg up to complete the 3rd leg of the wedge pattern to retest the 1080-1100 top of the trading range. iv. Soybean Oil – whether the sell of last week was merely just a 2 legged pullback, before the second leg up in Oct resumes. We should have more clarity with a few more day’s price action. I am slightly leaning towards the bulls case for a small sideways to up move in the next 1-2 weeks. With more information, I may change this stance and will update accordingly. From the above, it should more or less give you some context to the current state of the market conditions. Should there be no major changes from my analysis above, I will update again next weekend. Trade safe, and I welcome any feedback from you. Best Regards, Tech Trader
MYX:FCPO1!
by Tech_Trader88
Weekend Updates – 4 Oct 2020 | CPO, Soybean, Soybean Oil & FXWeekend Market Updates & Analysis 4 Oct 2020 What Happened 1) FCPO opened higher Monday and then traded lower by Friday, closing near the low of the week. Recap from last Weekend’s update. You can read last week’s update here: Weekend Updates – 27 Sept 2020 | CPO, Soybean, Soybean Oil & Currencies 2) On Point: 58, 59, 60: In my last update, I have said that the odds favor a second leg down before we see a retest of the highs. So far we have the second leg down. Will it continue lower? We will look at these questions below. On Soybean 3) On Point 26, I said that the bear inside bar closed at the lows, but followed a tight bull micro-channel. Sellers will try to push below the low, but will likely find more buyers below. i. Prices did push below the low of the previous week, and did indeed find more buyers below, and reversed sharply on Wednesday (believed to be due to lower than expected Soybean stock report) and closed the week as a bull bar with a tail above. On Soybean Oil 4) On Point 37, I said the bears are looking for a second leg down after a brief bounce and chances are they will likely get it in the next 1-2 weeks. i. Market held steady for the first 3 days and sold off into the weekend for the second leg down to close the week as a bear bar closing at its low. On Dollar Index – DXY 5) On Point 53, 55, I said that prices was trading at a trend line resistance at 94.50, and that we may see price pullback before deciding if it there will be another push up to test resistance. i. So far we have the pullback to support at 93.50 ii. Market is still deciding if this support will hold, and if we will get the 3rd leg bounce up. We should find out by next week. What’s up ahead? Soybean Monthly 6) Soybean monthly closed back as a bull bar with a moderate tail above. Price is just within a touch of the multi year trading highs around 1080-1100 level. i. This makes Sept bull bar as a buy signal bar for the bulls, and we will likely see an attempt to break above the highs of Sept. ii. Should the bulls get it, we would then ask if the price can continue up to the top of the trading range around 1080-1100, and if prices can break strongly above it. 7) These areas tends to be magnet and target for the bulls. Will prices get there? Here are some of the things we need to look at: i. China is now on holiday, and will be back to the markets on the 9th which is Friday of next week. Will they continue to buy more Soybeans? ii. I think if we see a weakening of USD moving forward, I do not see why not because China still have a trade deal to fulfill and they would want to be seen as a credible trading partner holding up to their part of the Phase One trade deal in the eyes of the International community, . iii. Also, should the stock levels for Soybean and production continues to decline, these are supportive for the market too. iv. So we will need to monitor these accordingly. Soybean Weekly 8) Soybean found more buyers after a failed break below last week’s low. This week closed as a bull bar but with a prominent tail above and below. i. This is poor follow through from the bears and this is a positive point for the bulls. A consecutive bear bar would have made the bear’s case slightly stronger, but they were not able to create it. This week’s bar is a slightly weaker buy signal bar for next week due to the tail above. 9) So essentially, price has been trading sideways for the last 3 weeks between 985 to 1046 with this bounce. i. Is price forming a potential Final Bull Flag? ii. There is a potential for this, especially after an extensive run up, price is trading just below the multi year trading range highs and resistance around 1080. iii. If this is true, it means that price may continue to consolidate here for a bit more, and then have at least another leg up into the top of the trading range attempting to break above the trading range and make new highs. 10) Can price trade down from here? Let’s look at the Daily Chart. Daily Soybean 11) Soybean tested the support levels that we highlighted last week around 988 which is the 20ema on the Daily Chart. 12) The support held, and price has bounce to trade near the recent highs currently. Can price trade higher from here? 13) So far these are my thoughts: i. The USD is generally strengthening in the last few weeks, “theoretically”, we should be seeing a lower Soybean price like Soybean Oil. The fact that prices is back trading near the recent highs is telling me the relative strength of Soybeans is there and is bucking the general market trends. ii. We still need to see what Soybean does from here, but currently from its relative strength, I would favor slightly higher prices. Soybean Oil Monthly 14) The monthly Sept soybean oil chart closed below the middle the bar, has a small bull body, has a large prominent tail above, and a noticeable tail below. 15) In my last update on Point 33, I said that “Should the bears fail to create a strong bear close for the month, but price still close below the middle of the month, it is still a sell signal bar for Oct, but a weaker one and we may find more buyers than sellers below Sept lows at support areas” primarily because this is the first pullback following a 5 month bull micro channel. Support areas that I am looking at is the 31, and 29 area. 16) On Point 37, I also said that the bears are looking for a second leg down and they are likely to get it in the next 1-2 weeks. So far the bears have managed to push below the lows of Sept, and currently the bar is a bear bar. i. But because it is still very early in the month, by the end of the month, the bar can look very different that what it is now. 17) I have also said due to the 4-5 bull micro channel on the monthly chart, we will likely find more buyers below at support areas, because the bulls are likely to buy the 1-3 month pullback. i. So I will be monitoring the 31 to 29 level as support areas for Soybean Oil. Soybean Oil Weekly 18) In my update last week on Point 37 i, I said that the bears would be looking for a second leg down and they are likely to get it in the next 1-2 weeks 19) On Point 38, I said that “After the pullback is completed, we should see the attempt to rest the recent highs and if the re-test is weak and choppy, and stalls before reaching the highs, traders will conclude that the trend is over and prices will reverse at a lower high or at some sort of double top.” i. This view still remain the same. 20) I will be monitoring if the levels 31 holds as a support, and if not, probably around the level 30-29. Daily Soybean Oil 20) So far we are looking at the second leg down for Soybean Oil. 21) My views this week remains the same as last week and as I have summarized in point 19 above. 22) I will be monitoring if prices test the support levels between 31 to 29 and whether these support areas can hold for the re-test of the highs to happen. Dalian Palm Olein (Monthly, Weekly, Daily) 23) I will not be updating on the Dalian Palm Olein market as China is still in a trading holiday until the 8th and their market will open on Friday of next week. FCPO Monthly 24) In my update last week, I said that the bears would want to close the monthly bar near the lows, which makes at least slightly lower prices likely this week. i. The bears manage to get that by Wednesday, and prices bounce slightly in the new month bar and then traded below Sept lows on Friday. 25) Last week I talk about the bears are likely to get their second leg down, and that the areas of 2800 and 2650-00 would be the support areas I will be looking at to see if it holds so that prices can create the attempted re-test higher. 26) The monthly bar has just started and is currently a bear bar. The bar could look very different by the end of the month. Weekly FCPO 27) Last week I said we may potentially get an inside bar, which means prices trade at a small range – this is a common pattern following an inside-outside bar. 28) But I also said that the bears are looking for a second leg down, which they will likely get as the odds favor that, and thereafter, to monitor 2800 and 2650-00 areas as support areas as I suspect there will be more buyers than sellers below due to the strong trend up since May. 29) So far the bears are getting their second leg down. Price closed the week at 2708, and it is a bear bar, which makes slightly lower price next week a possibility. 30) I will be monitoring if we see strong profit taking from the shorts at the support areas that I have highlighted, and if the support areas hold, to see an attempt to re-test the recent highs. i. We also have to monitor prices against other factors such as how Soybean, Soybean Oil, and the currencies are doing to make an assessment on how prices will behave moving forward. Daily FCPO 31) On the daily chart, we can see prices resuming the second leg down, but the strength of the second leg is not as strong as the first leg as we can see the overlapping bars and choppy trade. 32) Price is still in the process to complete the second leg down and I will be monitoring the 2800-2650-00 areas and see if prices holds there. i. Once the second leg is completed, I do expect to see an attempt to re-test the recent highs. ii. The manner of the attempt (bounce) will tell us a lot about prices moving forward. iii. A strong re-test of the highs with very strong buying pressure indicates that prices will attempt higher prices and try to break out of the 3150-3200 level, while; iv. A weak re-test of the highs with weak buying pressure likely indicate that the bull move and test of the multi-year trading highs has ended and the re-test will likely be a lower high where bears sell the bear rally. 33) Take note that we have to look at the above together with these factors below also: i. How is the Production in Oct? Rising? Decreasing? ii. Is the expected rainy season happening causing massive flood and harvest disruption? iii. Is the Covid situation in Malaysia worsening, and causing new strict Movement Control Order where businesses are not allowed to open again? (This will hurt confidence and demand) iv. How is the USD as measured by the Dollar Index trading? A strengthening Dollar is bad for Palm, SB, SBO. v. How is the Chinese Yuan and Indian Rupee trading in relations to the USD? (we will look at these below) USD/Chinese Yuan 34) The USD has been steadily weakening against the RMB/Chinese Yuan since May. We saw the USD strengthened slightly last week, but this week, traded slightly lower again against the RMB. 35) As we have seen in the Dollar Index, the USD is attempting a bounce, but so far have just managed a 2 legged bounce and currently is in the pullback of the second leg. Should the USD create a weak bounce and then continue to weaken, that would be bullish for the RMB, which is bullish for Soybean/Soybean Oil, which is bullish for Palm. 36) So far from the USD/CNY chart above, the USD is weakening steadily in a tight bear micro channel – but prices is now sideways in the last 3 weeks, which indicates a small trading range around 6.8300 to 6.7500 area. 37) Can the RMB continue to strengthen against the USD? Looking at the tight bear channel, it certainly looks likely. At the very least, this sideways consolidation could be building at least as a Final Bear Flag, which means at least slightly lower prices are likely. 38) So we have to monitor this closely as a stronger RMB against the USD is good for commodities (Soybean/Soybean Oil) which is also good for Palm. Indian Rupee/USD 39) I would also be looking at the Indian Rupee(INR) versus the USD. I believe logically that a stronger Indian Rupee against the dollar is favorable to Palm prices. 40) Why? Because all palm exports are traded based on USD, and with that view in mind, a stronger INR will be favorable to Palm exports because you can get more USD with less INR. i. Alternatively, think of it this way: Can you imagine a situation where we have a weakening INR vs UDS (Cost more Rupee to buy USD, and then, a stronger MYR vs USD (Cost more USD to buy MYR?). Bad + Bad. Can’t be good. 41) So far there was a weakening of the INR vs USD in the month of Sept, but currently we are looking at the INR ticking higher last week and closed as a bull bar, but with a tail above. I think we should see slightly stronger INR in the next 1-2 weeks. Dollar Index – DXY 42) So far, the Dollar Index has had a 2 legged bounce to the bear trend line, and last week pulled back to the 20ema on the daily chart which is support. There is also a lower trend line below as support around the areas of 93.50. 43) Currently, markets are watching if we will get a prominent 3rd leg up to test around the 95-96 area – a wedge push up or better. i. Why I say prominent – because sometimes, the 3rd leg up can be very inconspicuous and may just be a 1 bar up, and reverse down. ii. In this case, then the market will likely conclude that this bounce from Sept is likely just a bear rally, and will sell the bounce for a 3rd leg down to to test 92 area (recent lows) and then 88-90 area as I have discussed in my previous 2 reports. 44) So I think the next 1-2 weeks are crucial to monitor the movements of DXY. A stronger dollar is bad for commodities prices namely Soybean/Soybean Oil/ Palm and vice versa. 45) Personally, I think we are going to see slightly higher prices in DXY to around 95-96 in the next 1-2 weeks (which is temporary not good for commodities), and I will be looking at the buying pressure of the bounce. A weak 3rd leg up indicate that it is just a wedge bear rally and we will likely see a weaker dollar in the near future. i. I will be monitoring the Dollar as per the above accordingly. Summary 46) We have covered a lot of grounds and these will be what I will be looking at: i. Soybean traded back near the highs. – is price consolidating sideways, and preparing for another move up? Or is price trading lower next week? First is good for the bulls, while the second is good for the bears. ii. Soybean oil to complete its second leg down, and to monitor if 31-29 area holds as support – and if support holds, to monitor the strength of the bounce from there. A strong bounce = good for the bulls while a weak bounce is good for the bears. iii. FCPO is currently also forming its second leg down. I will be monitoring if the areas between 2800-2650-00 area holds as support for prices, and if yes, to monitor the strength of the bounce from there. A strong bounce = good for the bulls while a weak bounce is good for the bears. iv. Generally I can see the RMB and the INR is strengthening against the USD. I would like to see this continue which is favorable to the bulls, or at least sideways. A significant weakening of RMB and INR against the USD I think will definitely not be a good factor for SB/SBO/Palm. v. I think the Dollar is trying to find support around the areas of 93-93.50, and if the dollar finds support and bounces in the next 1-2 weeks to 95-96, this will not be favorable for commodities prices at least temporarily. I will also be monitoring for an inconspicuous 3rd leg up – maybe a 1-2 bar up, then reverse down. If this happens, I think the market will believe this recent bounce is just a wedge rally and sell it. 47) As I have highlighted last week in Point 63 of last week’s report, is it possible where we see the Dollar Index strengthen but Palm prices still holds and not drop much? Answer is yes, its possible. Why? i. What if production levels drops off significantly? This is good for bulls. ii. What if it starts to rain at any moment, we see severe flooding in ffb production states and disrupts harvest? This is good for bulls. iii. What if exports figures are good? This is good for bulls. iv. What if the Dollar index strengthen against other currencies, but remains weak against RMB and INR? This is also good for SB/SBO/Palm. iv. So a strengthening Dollar Index does not necessarily equals lower Palm Prices. We need to see it in relation to the RMB, INR, local productions, demand and related factors. 48) So for next week, things are status quo as per last week’s update. I will be monitoring: i. How strong the current leg down in FCPO is (not very strong currently); ii. Whether the areas of 2800-2650-00 area holds for a re-test higher; iii. and if we get the re-test higher, how strong is the re-test? Strong = good for bulls. iv. At the same time, to monitor if we have a a weakening or strengthening Dollar against CNY & INR. 49) Can prices continue to drop off to say, 2400 non-stop? i. While there is always such a possibility, currently I would say the probability of this happening is lower than prices having at least a small sideways to up re-test of the highs after holding at support. ii. The reason for this view is that we can see Soybean currently traded back to near its highs; and iii. We do not have a firm strengthening of the Dollar – Its just a bounce at this point. iv. Unless Soybean suddenly sells off aggressively, then I would start to be worried about Palm too. Other Black Swan Factors To Watch 50) i. Covid cases is ticking up in Malaysia. If we get another strict Movement Control Order, it might hurt confidence and consumption. ii. The leader of the freeworld is sticken with Covid. He should get the best medical care in the world. But (*touch wood) in case he kicks the bucket, this will likely cause a shock to the world markets and we may see big movements in all instruments such as commodities and equities (big gap down likely). iii. Even if he doesn’t kick the bucket, he might emerge from this sickness being more resolute to fight the disease he has been writing off until recently, and we may see potentially drastic action from him (though unlikely – just something to watch out for) What Did I miss out? 51) I also want to touch a bit on Crude Oil. 52) Crude is currently forming the second leg down – which looks like just like a technical correction since the big sell of in April. 53) Preferably, I would like to see Crude start ticking higher after testing support around 36 – 34 area. Lower crude price is generally not so favarable to commodities prices because it can indicate: i. General world demand and thus economy not doing very well. Why? A strong world economy with strong consumption of energy for economic production, automobiles and flying should cause higher crude prices. ii. So if crude continues to trade lower and lower, that does that tell you? iii. Well it tells us that demand is not as strong. i.e. Less airplanes flying, people driving less due to lockdowns, industries buying less energy for their production usage while output for crude oil can be expanded at any time (Opec and other producing countries are already cutting down their production which can be increased at any time). So I will be keeping an eye out for Crude as well as a general barometer for world economic health. If we see more and more countries resort to strict lockdown globally as we enter the colder seasons and potentially 2nd and 3rd wave of Covid cases, this will be negative for Crude, and hence, general sentiments and confidence. I think that’s it for now. It is likely that there will not be an update from me next weekend as I will be away for a personal matter. So unless there are big changes to my analysis this week, I may publish a short quick update on the major changes. Otherwise, expect no updates from me next week. Wishing you well, trade safe, and as always, if you have any feedback, do get in touch with me. Thanks for reading. Best Regards, Tech Trader
MYX:FCPO1!Long
by Tech_Trader88
We are getting close to trend changeIt has been a long time since my last Soybean forecast. It is time to pay attention to this market. It is setting up for the decline. Commercials are heavily selling, the seasonal tendency is to the downside, and Insider Accumulation is turning bearish. So, if on Monday we get below Friday’s low, that will be a sell signal. However, it seems like it will take more time to form some pattern. We may see a very short-term rally followed by a sell signal formation. Don’t hurry and wait for confirmation. We have a good setup, but timing matters a lot in this business.
CBOT:ZS1!Short
by UnknownUnicorn1156963
8
FCPO | Weekend Updates & Analysis – 27 Sept 2020Weekend Market Updates & Analysis 27 Sept 2020 Where we are 1) The market opened higher on the 21st, and started to sell off in the afternoon throughout the whole week, and had a short covering outside up bar on Friday on some short profit taking. 2) When I was writing the last market report, prices was still very bullish and there was no indication of any strong pull back yet. 3) However, I did voice my caution with the following points in my last update. I have stated: i. That prices for FCPO, SBO and Dalian are all testing their multiyear top of the trading range. ii. Point 14: FCPO is in the 3rd push up of the wedge which tends to attract profit takers iii. Point 23: Soybean’s move up is climatic and usually not sustainable iv. Point 25, 27, 28 : Soybean Oil chart is climactic and tends to attract profit takers at the top of the trading range. v. Point 32: Dalian Palm Olein is testing the top of the 7 year trading range, and is a wedge which tends to attract profit takers especially if we have a strengthening of the USD vs RMB. vi. Point 53: A strengthening of the USD against RMB will damper the rally in SB/SBO vii.Point 56: Usually after a big rally where we have a wedge pattern, and price is at a major resistance areas, we tend to see some profit. You can read last week’s update in detail here. Weekend Market Updates & Analysis 20 Sept 2020 | CPO, Soybean, Soybean Oil & Some Currencies My opinion of what caused the pullback 4) Note that USD started to strengthen sharply around 3pm Malaysian time, which is the open of the European market on the 21st of Sept 2020. 5) With that, a lot of markets started to sell off across the board. SBO/BO, Gold/Silver, Corn, Wheat, European Equities, China Equities, Indian Equities, Taiwan Equities, Australian Equities, USA Pre-market Futures, basically most of what instrument that has benefited from a weak dollar and had been rallying prior to that sold off. 6) As for Palm/SBO/SB, I have said that due to the continuous rally for months, there are bulls who have been long since May and are looking for reasons to book their profits. i.With the strengthening of the Dollar and the global equities and commodities unwinding, it gave bulls a good reason to book their profits and close their position, which caused a strong pullback. ii. As with most climatic push up that is excessive and sharp, once the selling started, selling begets more selling, and we saw 4 continuous days of selling (Monday to Thursday) and a bounce on Friday. What’s Next? Monthly FCPO 7) In my last update, I said that the monthly chart was in a strong bull bar, and was unlikely to turn into a bear bar. 8) However, the unlikely thing has happened and with 3 more trading days to go next week, if the bar close below the middle of the bar or near the lows, it is a bearish bar and a sell entry bar for sellers. 9) So we have to see how the bar closes next week, whether bulls can push price back higher and close above the middle of the bar, or bears can maintain prices below the middle of the bar, and close as low as possible to the low of the month. Weekly FCPO 10) Price reversed down from the top of the multiyear trading range and closed the week as an outside down bear bar. 11) Price found some support at the lower trend line and reversed some of the down move on Friday so the week has a prominent tail below. 12) The bears would have preferred a strong close at the low of the week. A tail below shows the lack of conviction of the bears. The bear bar is a sell signal bar for next week albeit a weaker one especially near support. 13) With last week being an inside bar to this week’s outside down bar, it is possible that next week we might get another inside bar, which mean price trade in a smaller range but still within this week’s high and lows. 14) We will have to monitor if the bears get a breakout below this week’s low during next’s week price action. Since the previous trend up from the end of April is fairly strong, I suspect we should see more buyers below than sellers after the second attempt to go sideways to lower. i. Other potential support areas below is at 2800 and at the 20ema on the weekly chart at around 2650-00 area. Daily FCPO 15) Price reverse down strongly from the top of the trading range, and found support at the bottom of the trend line just below the 20ema. 16) Friday closed as an outside up bull bar, also an inside-outside bar with Thursday’s bear bar, and taken together, Thursday and Friday was a Down-Up reversal at the 4 month’s Trend line. 17) Bull are looking for a continuation of the bull trend following this sharp pullback. Will they get it? It will depend on a few other factors which we will look into throughout this report. i. The bears on the other hand are looking for a second leg sideways to down after a brief bounce and for price to test around 2650-00 area. 18) This current strong pullback from the bull trend tells us that the bulls are very willing to sell at these 3100-3000 top of the multiyear trading range, and sellers are also looking to sell at these areas. 19) Usually following a strong uptrend, markets prefer to see some type of a double top before we see a proper reversal of the trend. This means that traders will be looking to see if we have a strong re-test of the recent highs of 3100 after some kind of sideways to down second leg test. i. If we have a strong re-test of the high, traders will then see if we get another breakout to a new high and for the trend to continue. ii. If we have a weak re-test of the highs, traders will conclude that the trend has likely ended and will be looking to sell some type of double top with the recent highs. Take note that a double top does not need to be exactly at 3100. It can higher, or lower and still be considered a double top. Some fundamental issues effecting palm 20) i. Production is expected to be lower next month between the range of 3-8%. ii. Expectation of more rain to hit this region which may cause flooding and may cause harvest disruption. iii) China will be on holiday for the first 8 days of Oct. I’m still wondering the effect this will have on palm as I cannot say for sure. iv) Some talk of labor shortage in the plantations. Monthly Soybean 21) Soybean monthly pulled back near the high of the multiyear trading range. Currently, the bar has a prominent tail above which indicates some profit taking by the bulls and some selling from the bears but still trading slightly above the middle of the bar, which is to the bull’s favor. 22) There are 3 more trading days for Sept, and the bears wants the month to close below the middle of the bar, while the bulls want prices to bounce to close above the middle of the bar, as high as possible. 23) However, even if the bulls get a bounce in the next few days and prices close above the middle of the bar or near the high of the month, price is currently trading near the top of the multiyear trading range, and the bulls have been long since May/June and if price stalls at the top of the trading range, we will likely see more profit taking from the bulls and the bears coming out to sell. i. We need to monitor this in conjuction with the Dollar’s move also as I will explain more below. Soybean Weekly 24) Soybean weekly closed as a bear inside bar. This is the first bear bar following a tight 6 bull micro channel which indicated very strong buying prior to this pullback. Take note that the bears was not able to close the weekly bar below the low of last week, which indicated the bears are not as strong as they would have preferred. 26) Because it is a bear bar closing near it’s low, it is a bear signal bar for next week. So bear will likely try to push prices below the low of this week. However, because this is the first bear bar following a tight bull microchannel, we will likely find more buyers than sellers below the bar. i. I will be monitoring the levels 988 and 940 area as support levels. Daily Soybean 27) This is the first major pullback for Soybean on the daily chart since the first week of August. It was in a 1.5 months of climactic bull parabolic wedge test of the top of the multiyear trading range and prices is currently pulling back to its 20ema around 990. 28) Because the upmove was so strong, we should expect traders to buy this pullback once it is over. Support areas that I am looking at is around 988 and 940 area. i. Take note that the bears are looking for a second leg down from here after a brief bounce, and will likely get it next week. 29) Usually for trend to reverse, it has to have some kind of major trend reversal pattern, meaning prices would have to have some kind of re-rest of the highs and make some type of double top. So traders will be looking at the strength of the re-test of the highs after this pullback is over. 30) If the re-test of the highs is strong, bulls want prices to breakout of the top of the multi year trading range. However, we also have to look at how the USD is trading in relation to SB. If the Dollar continues to strengthen, then price may stall again and turn down lower. If instead we see the Dollar turn down lower, then it will be supportive for SB prices and traders will look to see if price can break above the top of the multi year trading range. Monthly Soybean Oil 31) Monthly SBO turned down lower near the high of the multiyear trading range. The monthly bar currently is a doji bar. With 3 trading days left in the month, the bears wants the bar to close near the low below the open so that the month will have a bear body with a big tail above, which is a reversal bar and a signal bar for lower prices in Oct. 32) The bulls on the other hand wants prices to reverse up in the next 3 trading day so that it can close back above the middle of the bar so that it would not be too bearish for Oct. 33) Should the bears fail to create a strong bear close for the month, but price still close below the middle of the month, it is still a sell signal bar for Oct, but a weak one, especially because prices followed a 4 bull micro channel since May and we may find more buyers than sellers below Sept lows at suport areas. i. I will be looking at around 31 and 29 area as support levels. Weekly Soybean Oil 34) Soybean Weekly closed as a big bear bar, but with a prominent tail below. This is the first major bear bar since the end of April, which is the first time since then that the bears was able to create any significant selling pressure. 35) However, this bear bar came following a tight bull channel which lasted 4+ months. So we are likely to see more buyers than sellers below the low of thus bear bar at support levels. 36) As I have written previously, unless prices went up in a climactic fashion too excessingly which will cause a very strong reversal, prices usually has to go sideways into a trading range before it will create a proper reversal. 37) This means that we will likely see an attempt to re-test the highs made in in Sept moving forward after this pullback is over. Traders will be looking at the strength of the re-test, whether the buying pressure is strong, or weak and choppy. i. Take note that the bears are looking for a second leg down after a brief bounce and chances are they will likely get it in the next 1-2 weeks. 38) After the pullback is completed, if the re-test is weak and choppy, and stalls before reaching the highs, traders will conclude that the trend is over and prices will reverse at a lower high or at some sort of double top. 39) It is also important to monitor where the Dollar is trading moving forward. A weaker Dollar will be supportive for SBO prices while a stronger Dollar will likely bring out the bears and cause the bulls to book their profits. Monthly Dalian Palm Olein 40) So far the monthly chart for palm olein reversed down and is trading close to the lower end of the month’s range with a prominent tail above. Prices reversed lower near the top of the multiyear trading range as the Dollar strengthened. 41) With 3 more trading days to go, and the market closing for the first 8 days of Oct, I will skip this chart until the market reopens again. Weekly Dalian Palm Olein 41) The weekly bar closed as a bear bar, the first major bear bar near the top of the multi year trading range. 42) Since this market will be closing for the first 8 days of Oct, I will skip this chart until the market reopens again. Daily Dalian Palm Olein 43) Prices sold off neat the top of the multiyear trading range following a wedge 3 push up pattern. 44) Since this market will be closing for the first 8 days of Oct, I will skip this chart until the market reopens again. Monthly Dollar Index – DXY 45) Currently, the monthly bar for the Dollar is a strong bull bar after a failed breakout below the low of Aug. 46) With another 3 trading days to go, the bulls wants to maintain a strong close where prices close near the high of the months. The bears on the other hand wants the opposite and wants prices to close to the middle or at least below the middle of the month so that they can reduce some of the bullishness. 47) Should the bulls get that they want and prices close near the high of the month, we should see at least slightly higher prices next month. There is a resistance magnet above at 95.00 which is the weekly 20ema and price may test there first before deciding if it will continue higher or reverse back lower. 48) A stronger dollar is bearish for SB/SBO/Palm which a weaker dollar is supportive for the grains and palm. Weekly Dollar Index – DXY 49) Price closed as a big bull bar on the weekly dollar chart so we should see slight higher prices next week. Price is currently heading towards the 95.00 level which is the 20ema and that price is a magnet and target for the bulls. We may not see any significant selling until we reach there. 50) We are currently in the second leg of the bull bounce which is what most traders expect. Sometimes prices can extend to a 3rd leg, which means we may see a brief pullback in the next 1 weeks, and then a resumption up to try to break above the 95-96 area. i. And should price fail to break strongly above the 95-96 area after the 3rd leg up, traders will assume that the bounce is just a 2 legged or a wedge bounce and sell the lower high. 51) In my last update, I have said that the Dollar looks like it is still in its second led down since March, which means we may see another leg down to test the recent low areas of 92-93 levels first, and if manage to break it, then 89-90 in the weeks/months ahead. 52) We need to follow the development of the Dollar closely as SB/SBO/Palm is currently trading inversely to the Dollar. A weaker Dollar is supportive for prices of commodities such as SB/SBO/Palm and vice versa. Daily Dollar Index – DXY 53) On the daily chart, the Dollar is in a 6 bar tight bull channel which is signs of strong buying. This means that should we see a brief pullback next week, there should be more buyers than sellers and they will buy that first pullback. We should see slightly higher prices as traders will buy the pullback for a 3rd leg up. 54) However, do note that there is a magnet and resistance above for the Dollar around 95-96 area. Should price test that area, and stalls, traders will assume this 3 legged wedge bounce is just a bear rally, and will sell the bounce for a 3rd leg down to test 92-93 level, then 89-90 level in the weeks ahead. 55) Also note that the current price at 94.50 is at the bear trend line (not drawn) and if price can’t break above this trend line, traders will assume that this is just a bear rally, and will sell the Dollar for another leg down to retest support areas. 56) So we need to follow closely how the Dollar is developing moving forward as a weaker Dollar is supportive for prices of commodities such as SB/SBO/Palm and vice versa. Summary 57) So far, this is the first strong selling pressure since the end of April for FCPO. 58) The bears are looking for a second leg sideways to down after a brief bounce in the next 1-2 weeks. i. I’m looking at this 2800 and 2650-00 as potential support levels. ii. After the pullback is over, we should see an attempt to retest the highs. iii. The manner of the re-test will give us a lot of information about prices moving forward. iv. A strong re-test of the highs indicate that the strong selling was merely a pullback in the overall trend and; v. Should we also get a weakening Dollar moving forward, traders will expect higher prices. i. However, if we see a lackluster re-test of the highs with choppy trading and weak buying pressure, and at the same time, the Dollar continues to strengthen, then we have to be careful because we may see more bulls close their longs and as price re-test higher and bears starting to scale into their shorts towards the high of the trading range. 59) Can prices for palm continue to trade low continuously next week? i. I think the odds are that the bears will get their second leg down after a brief bounce. ii. I will be looking if this 2800 area holds, and if not, for next support around 2650-00 area. 60) I’m more of the view that prices will trade lower for a second leg down first, and then attempt a re-test of the highs after testing support. i. Is there a scenario where price does not have the second leg down, and price just continue to bounce from here to re-test the highs? ii. The answer is yes, but slightly less probable. If this happens, then the trend will likely continue much higher as the bears will assume the strong bull trend is resuming and the bull will regain control of the market again. 61) For now, this is what I will be monitoring in the next few weeks i. If the second leg down for the bears happen as odds highly favor it, and if it does, whether the 2800 area can hold, and if not, if 2650-00 area can hold. ii. For Dollar to consolidate around the 93.50-94.50, and then attempt to test then 95-96 level, which will be the 3rd leg up. If prices does not continue to strengthen from there, sellers will sell this wedge bounce as a bear rally for price to re-test the recent low’s of 92-93 and then 89-90. iii. After the second leg down is completed, I will be looking for FCPO to attempt to re-test the highs and the manner in which it re-test will tell us a lot about prices moving forward. A strong re-test signals higher prices moving forward. vi. There is talk about lower production and also rain coming which will effect the production of FFB. So should this materialize, we will see the production of FFB severely effected which is supportive for prices especially as the current stock level is not particularly high. v. As for exports, I’m still unsure the effect of China being on holiday and the effects it will have on demand. However with Deepavali coming in Nov, we should see some buying from India taking advantage of the recent lower prices. 62) Can prices break strongly above 3150-3200 in Oct/Nov/Dec which is also the top of the multiyear trading range? i. There is a chance of that happening especially if the USD weaken considerably and trades down to 89-90 area. ii. We also have to keep in mind that most breakout fails within a few bars so even though prices may break above the 3150-3200 range and trade higher, there is also a 50% possibility that the breakout will fail, especially if we have a stronger dollar during that period of time. So we have to monitor this closely. iii. The chance of us getting a strong re-test of the highs moving forward will also increase if the production in Oct is seriously hampered by constant rain and flooding which causes lower production. 63) Another thing I would like to point out is this: Is it possible that we see a stronger dollar, which be bearish for prices for SB/SBO/Palm, but instead we still see slightly higher prices for CPO? i. Yes it is also possible that the global macro factor be bearish, but due to local factors such as our ffb production falling severely due to seasonal lower production or flooding effecting production, our local market may diverge from the global and related market trends. ii. A good example of this was earlier in Sept where the global market sold off, while SB/SBO/Palm was still holding on. iii. Ideally, we would like to see all the factors are aligned, but you may not always get that. So I think it is prudent for us to monitor all of the factors as a whole from the Macro factors effecting prices globally such as the USD, SB/SBO to the Micro factors effecting our local markets (such as production, weather, export, demand) individually. iv. Markets tend to have periods of strong co-relation but also periods of divergences. 64) I will be monitoring the market accordingly to these parameters that I have laid out above. Should there be any major changes, I will update accordingly in a new post. Thanks and please get in touch if you would like to leave a feedback. Thanks and trade safe. Best Regards, Andrew (Tech Trader)
MYX:FCPO1!
by Tech_Trader88
FCPO | Weekend Market Updates & Analysis 20 Sept 2020 Weekend Market Updates & Analysis 20 Sept 2020 1) Hello All, been a while since my last market updates on 27th March 20 when the market volatility was very high and the “Everything” sell off occurred. A few of you have been asking if I would restart my writings and thoughts of the market, and I too thought I should restart it. It helps me think through all of the factors affecting our palm market and also helps me sort through my thinking. 2) I am making a few changes to my market updates and analysis. i. I will be covering more instruments that has an effect on palm prices ii. While previously I kept the number of people receiving this report very small, I am planning to experiment with a blog style website which will be accessible to the public. Let’s get into the analysis. Where we are. 4) As of 18th Sept 20, Cpo has rallied strongly in line with Soybean/Soybean Oil’s rally in the USA on the report of strong China demand and bad weather effecting productions. 5) Personally, on top of these two factors, keep in mind that US-China has a trade deal where China has to buy an enormous amount of agriculture products such as Soybean from the USA. 6) So why buy now? For one, the dateline of the trade deal for this year is approaching. But I believe another bigger factor is the weakening of the USD vs the RMB. While a weakening USD is generally not good for regular people earning and spending USD, it is actually a stimulative factor for the economy because a weaker currency encourages and increases that country’s exports, while reducing imports, which will also reduce the trade deficits. 7) So if I were to explain why is China buying a lot more Soybean from the USA now? I would say it as a combination of trade deal agreement, weather effecting crops production, with an overarching weaker USD which makes it advantageous to buy USA exports right now. 8) Such a strong rise in the competing oils has also pushed palm prices up significantly. It only makes sense. If you are looking at SB/SBO rising 1.5-2% daily, would you be short the futures for palm? It would be suicide. 9) As the futures rise, physical would have to rise accordingly too. 10) Add the better local exports and static or slowly declining production for palm for Sept (and possibly all the way into the end of the year), and we are also moving into a seasonally bullish months (year end) for palm. So, what’s next? Monthly FCPO Chart 11) So far on the monthly chart, FCPO is still very strong. It is in a bull micro channel, where price never traded below the low of the previous month since May. Currently this month is a big bull bar, and we are testing the highs made in Jan 20. 12) Overall, price has been in a trading range since 2012 (3200-1900). Prices tested the high of this trading range in 2012 and 2016 and around 3150 made earlier this year in Jan, and current Sept is testing it too. Will price breakout from this 3200 range into 3600 or 4000? It is important to remember that most breakout fails within a few bars. However, we need to view that with other factors too which we will look at below. 13) So far, the buying pressure is strong and its being pulled towards the top of the trading range of 3150-3200 area. Sellers will not be selling much until we reach that magnet area, so we are seeing the buy vacuum effect heading up. Weekly FCPO Chart 14) So far the weekly chart is in a small pullback trend, with a wedge pattern. Currently, we are in the 3rd push up of the wedge which tends to attract profit takers near the magnet targets above. 15) With that being said, from May until now, sellers has not been able to create any strong bear selling pressure as we do not have any consecutive 2 weeks sell off. This reflects a very strong bull and very eager buying of every dip. 16) So for the weekly, I can see a wedge pattern developing, as we head into the high of the 8 year trading range with the top of the channel also around the range of 3150/3200. Daily FCPO Chart 17) So far on the daily chart, we see the same 3 push up, which is a wedge as we head towards the magnet top of the range above of 3150-3200. Question is, can price break 3200 non stop and continue to go up non stop? 18) If I look at Soybean and Soybean Oil (SB/SBO), they are also in similar price action in that, they are testing the top of the trading range since 2014, and making a double top with Dec 19/ Jan 20 highs. 19) Simply making a double top does not automatically mean prices are coming down. We have to look at all the factors together with these technical observations which I will cover below. Monthly Soybean Chart 20) Soybean is in a strong rally which started in Aug and continuing in Sept for the reasons described above. It is currently testing the highs made in 2018, which is also the top of the trading range since 2014. 21) There was a break above the top of the trading range in June 2016, which failed on the next bar and price traded back into the trading range. Can Soybean break strongly above the 1074 top of the trading range and continue up strongly? 22) Again, most breakout fails, and we need to look at this matter in conjunction with other factors too. Weekly Soybean Chart 23) Soybean’s weekly chart is in 1 single leg up to test the top of the trading range, which looks like a buy vacuum of price being sucked up to test the top of the trading range. It is climatic and usually it is not sustainable. However, due to the strong push up, prices usually can’t just reverse down unless the buy up is too extreme. Prices usually has to go sideways into a trading range before it can move down. Daily Soybean Chart 23a. On the daily chart of Soybean, we see a strong rally from the second week of August, continuous aggressive buying in the first 10 days of Sept despite the global equities and crude sell off, and price has accelerate at a higher pace on the 16th, 17th and 18th of Sept. 23b. The buying is very strong with sellers unable to create consecutive bear bars and unable to trade below the low of the previous day on most days on the daily chart (micro channel) since the rally started around 11th August 20. 23c. However, we are fast approaching the top of the 7 year trading range and we have to see how price reacts there together with the other factors which we will cover below. Monthly Soybean Oil 24) Soybean oil’s monthly is also testing the top of its 6 year trading range, and also Dec 19 / Jan 20 highs. The monthly chart has had bull bars since May until now, and currently Sept is also a big bull bar. 25) There are 8 more trading days to go, its unlikely that the price will reverse down to close as a bear bar. But a 5 month bull bar on the Soybean Oil chart is climactic and tends to attract profit takers at the top of the trading range. Weekly Soybean Oil 26) On the weekly chart, you can see very eager buying and there has not been any consecutive bear bar since May 20. 27) Prices is testing the top of the 6 year trading range and the highs of Dec 19 / Jan 20. This is the 3rd push up for SBO, and this 3rd push up has 2 big legs, which tends to be climactic and tends to attract profit takers especially if price stalls near the top of the 6 year range around 35.50-36 area. Also take note that the last leg of a wedge tends to have 3 individual push up, which is a wedge within a wedge. Daily Soybean Oil 28) On the Daily chart, we can see that price broke above the trend channel line at the end of August, but instead of reversing down, it went sideways and then up from 11 Sept onward. This current leg up has 3 pushes which is also a wedge pattern, and tends to attract profit takers. 29) The sideways consolidation from 27 Aug to 10 Sept is a good candidate for a Final Bull Flag. Monthly Dalian Palm 30) Dalian monthly is currently testing the top of the 7 year trading range at around 6500. Price has 5 bull bars since May. Will price break above the top of the 7 year trading range of 6500? We need to see this in conjunction with other factors such as palm production, and other competing supply and demand factors as well as the currency markets. Weekly Dalian Palm 31) On the weekly chart, we can see the same wedge pattern, similar to FCPO, and the current 3rd leg is big and strong. 32) But price is testing the top of the 7 year trading range, and it is a wedge pattern which tends to attract profit takers especially if prices stalls near the top of the trading range of 6500, and we have a strengthening of the USD vs RMB and the crop production and demand data comes out negatively. Daily Dalian Palm 32a. On the daily palm olein chart, we can see a wedge pattern forming with the current leg forming the 3rd leg up. 32b. Prices are very strong with very aggressive bulls buying, and prices are testing the top of the 7-8 years trading range. 32c. We will have to monitor how prices behaves here, including the other factors that we will be covering below. Some Observations. 33) Its important to note that prices for SB/SBO/CPO/Dalian has bucked the trend in Sept by going up, while global equities had come down. Even Crude Oil fell for the first 10 days of Sept, which will usually be bearish for Palm/SBO prices. 34) During the earlier pandemic sell down in March 20, Palm/SBO/Dalian followed the broader global markets drop and sold off as well. But this round, it did not. I attribute this current rally in SB/SBO to: a. First phase of the Trade Deal to buy “an average” of $40 billion a year for the next two years in agricultural purchase targets. We are only in the first year now. b. Weaker Dollar which makes buying Soybean cheaper which has causes a rally in SBO/Palm. Above is the chart for the S&P 500, which is currently in a pullback phase since the 1st of Sept. Above is the chart for Crude Oil, which sold off in the first 8 days of Sept, but has recovered a lot of the move since. 35) Sept was a tough month. I had to decide if prices was going to follow the macro factors like it did in March when prices such as equities were at a major top, or the strong buying of sb/sbo/palm would continue. I choose to follow the macro factor of global sell off, which is not the right decision. 36) Hence from here onward, I will be reducing the co-relation factor for global macro, especially equities from my trading decision making factors. Moving Forward for FCPO/CPO 37) So, what’s next for our local market. Let’s look at a few factors. a. SPPOMA looks to be coming in lower as we head into the end of the month. i. Question: Is production beginning to taper off? General consensus is that production tends to trend lower towards these period of the year which is why this is a seasonally bullish quarter. ii. Is it possible that due the the rising prices, FFB suppliers are not harvesting as quickly and keeping crops hoping for higher prices next month? I think there is definitely some who are doing this. b. So far we are having a higher export figure in Sept vs Aug so there is increase in demand. Question is: Will the demand continue in Oct? 38) So looking at prices, I think it should continue to go and test the 7-8 year trading range highs around 3150-3200, and I will then see how prices behaves there. i. If prices stalls, and we see traders start to take profits there and; ii. Production in Oct is is much better than expected and; iii. Demand is trending lower for the month (Oct), then I think it is logical that we will see some profit taking near the top of this trading range area, as it also coincide with a wedge pattern in its 3rd push up. But if we have a situation where: iv. Production is coming off lower and; v. Ringgit is weakening vs USD, RMB, Indian Rupee and; vi. We also see demand more or less maintain the current levels or better; then prices may be able to break above the trading range high of 3150-3200 and head on higher to the next level of resistance. Currency Outlook USD – Dollar currency index – DXY 39) So far, USD has been selling off since the high made in March during the start of the pandemic global sell off. 40) Currently price has found some support at around 93.00. If it is forming a wedge pattern, it looks like it is only in its second leg down. 41) Meaning, we have to monitor if price can break lower and form the 3rd leg down to around 89.00 to 90.00 area before we see any significant bounce. 42) So far prices is trading sideways since the end of July, which is a 1.5 months sideways consolidation, which also happens to be a good candidate as a final bear flag with another leg down to 89-90 level. Above is the Weekly Dollar Index Chart. RMB/USD Spot 43) RMB has been strengthening vs the USD since June. Price is currently trading around 0.14676. 44) From 1 Aug until 18 Sept, price has has rallied about 3.15% on the 16th of Sept, but has pulled back in the last 2 days of trading this week, with total gains since Aug at 2.8% 45) We have to see how price moves from here. If USD breaks down another leg, it will be a bullish factor for commodities such as SB/SBO which will also effect the prices of Palm as a competing oil because the Chinese Yuan will have more purchasing power vs the USD. Above is the Daily RMB/USD chart. You can see the strengthening Chinese Yuan against the dollar since July. MYR/RMB 46) Since the March lows, the RMB has weakend against the ringgit from 1.593 to current 1.6449 which is a -3.22% lower purchasing power of the RMB vs Ringgit. 47) Price has largely been sideways in the last 3.5 months and we are trading back to the July Levels. The Ringgit strengthened against the RMB on Friday. Should the Ringgit continue to strengthened, it is a negative factor for palm demand. Above is the MYR/CNY pair. The higher the price is, the stronger the Ringgit is. A strong ringgit is not favorable to export/demand. MYR/INR 48) The Indian Rupee has been weakening against the Ringgit since June 2019. Naturally a weaker Indian Rupee is not a bullish factor for palm prices. 49) The Indian Rupee is currently testing the top Oct 2018 price around 17.90. Should the Indian Rupee strengthened against the Ringgit moving forward, that would be a plus for palm prices. Above is the daily MYR/Indian Rupee Chart. A higher chart indicates a stronger Ringgit, which is not a favorable factor for export/demand. Summary: 50) So far, prices in SB/SBO/Palm/Dalian are all trading higher and testing its 7-8 year top of the trading range. 51) This is supported by better demand in SB/SBO from China and weather concerns as well as a weaker USD vs RMB which is favorable for China to buy USA Soybeans. 52) I would want to see what prices does at around 3150-3200 range. Will price stall or will price consolidate sideways first, then resume higher again or would price reverse down? 53) The answer to the above depends a lot on a few of these important factors: i. Is the USD strengthening or weakening against the RMB? If strengthening, then it will cost more to buy SB/SBO and we might see a reduction in the buying spree there as a result which will dampen the strength in the rally. We need to monitor the USD/RMB pair accordingly. ii. If USD weaken further, that will provide more support for prices of commodities (including equities and other commodities i.e precious metals) such as SB/SBO which might cause it to break further higher above the 6-7 years trading range top. So this is an important factor to watch. iii. How is our production for palm moving forward in Oct? Higher? Lower? iv. How is the demand outlook for Oct? Higher or lower vs Sept? Other factors to monitor are also: v. Is the RMB strengthening against the Ringgit? If Yes, that’s good for palm. vi. Is the Indian Rupee strengthening against Ringgit? A stronger Rupee is good for palm while a weaker Indian Rupee is a negative for palm. 54) These are some of the factors I will be monitoring accordingly. 55) For now, we are entering the top of the trading range which are the targets for bulls, and I will monitor if price stalls at the prices of 3150-3200 and goes side ways or reverses according to what I have laid out in point 53 and point 60. 56) Usually after a big rally where we have a wedge pattern, and price is at a major resistance areas, we tend to see some profit taking because bulls who have been long since May are sitting on a lot of profits and would be looking to book some of the profits, and should price resume after a pullback, they can always buy the dip. 57) Looking forward at next month after such a big rally, especially at a major resistance area, it is logical for prices to experience some sort of pullback or sideways consolidation. 58) So we have to monitor the strength of the pullbacks accordingly. If the pullback is weak, it indicates that the buyers are still strong and controlling the markets and higher prices are likely. 59) If we see a strong pullback, then the sellers are starting to get active again, and longs would start to book their profits too. So we will have to monitor how prices behave after this 3rd spike up in Sept is done. 60) So to recap factors to see moving forward: i. Is production increasing or decreasing in Oct for palm? ii. Is the export figure increasing or decreasing for palm? iii. How is the Dollar trading in relations to the RMB? iv. What’s the weather situation like in the USA and the crops report? Higher or lower crops production? What is the Demand figure? Higher or lower? v. How’s Ringgit trading in relation to RMB and INR? vi. Are there any catalyst for change in prices for sb/sbo/palm? vii. How strong are the pullbacks after the recent rally? Weak pullback = bullish viii. How are the global macro outlook looking? (As I have mentioned above, I am reducing this as a factor in my decision making. However, it is also important to have the information as background info, but not use it as one of the main criteria for decision making. 61. Do note that on the monthly chart of FCPO, after every big rally, there is a month of consolidation. e.g. May rally, followed by June consolidation, July Rally, followed by Aug consolidation, and Sept rally, will Oct be a continuation bar or be another consolidation? 62. Keep in mind prices are trading near the top of a multi year trading range, which is a strong magnet and target area for the bulls. We do not know yet if they will start taking profits, or if they will continue to hold their longs. 63. For now, we will have to monitor the developing pullbacks after this move is done to have a good feel of the market moving forward, as well as all of the factors I’ve talked about above. Thank you for reading and if you disagree with any points I have made, I encourage you to write back to me, and let me know your thoughts and we can discuss it and see which of our thoughts makes more logical sense. Till the next update, trade safe. Best Regards, Andrew (Tech Trader)
MYX:FCPO1!
by Tech_Trader88
ZSN21-ZSK21The second good looking bear spread in soybeans complex. If you consider to trade both, i would either recomend to allocate your position between both 2 or just trade 1 on them. They tend to behave similliar, so it is not wise to trade correlated assets and manage them as 2 standalone trades. This soybeans oil spread is much less risky. Historical lowest prices were arround -0,2 which is about 150$ from current prices. That could be manage as position trade and do not put SL in to the market. But i strongly recommend everytone use SL. RRR is again over 2,2:1, which give us more chances to stay profitable even if my probability is below 50%. Since you follow all my trades, the probability is between 60-70%, but stay focused and trade on your own risk. This trade seems good even for people with smaller account. In the graph you can see marked SL below the recent low. It is a logical place where to put SL, if you do so. Good luck to everyone
CBOT:ZLN2021Long
by Martomin
SOYBEAN FUTURES (ZS1!) DailyDates in the future with the greatest probability for a price high or price low. The Djinn Predictive Indicators are simple mathematical equations. Once an equation is given to Siri the algorithm provides the future price swing date. Djinn Indicators work on all charts, for any asset category and in all time frames. Occasionally a Djinn Predictive Indicator will miss its prediction date by one candlestick. If multiple Djinn prediction dates are missed and are plowed through by same color Henikin Ashi candles the asset is being "reset". The "reset" is complete when Henikin Ashi candles are back in sync with Djinn price high or low prediction dates. One way the Djinn Indicator is used to enter and exit trades: For best results trade in the direction of the trend. The Linear Regression channel is used to determine trend direction. The Linear Regression is set at 2 -2 30. When a green Henikin Ashi candle intersects with the linear regression upper deviation line (green line) and both indicators intersect with a Djinn prediction date a sell is triggered. When a red Henikin Ashi candle intersects with the linear regression lower deviation line (red line) and both indicators intersect with a Djinn prediction date a buy is triggered. This trading strategy works on daily, weekly and Monthly Djinn Predictive charts. This is not trading advice. Trade at your own risk.
CBOT:ZS1!
by Dinjin
2
SOYBEAN FUTURES (ZS1!) WeeklyDates in the future with the greatest probability for a price high or price low. The Djinn Predictive Indicators are simple mathematical equations. Once an equation is given to Siri the algorithm provides the future price swing date. Djinn Indicators work on all charts, for any asset category and in all time frames. Occasionally a Djinn Predictive Indicator will miss its prediction date by one candlestick. If multiple Djinn prediction dates are missed and are plowed through by same color Henikin Ashi candles the asset is being "reset". The "reset" is complete when Henikin Ashi candles are back in sync with Djinn price high or low prediction dates. One way the Djinn Indicator is used to enter and exit trades: For best results trade in the direction of the trend. The Linear Regression channel is used to determine trend direction. The Linear Regression is set at 2 -2 30. When a green Henikin Ashi candle intersects with the linear regression upper deviation line (green line) and both indicators intersect with a Djinn prediction date a sell is triggered. When a red Henikin Ashi candle intersects with the linear regression lower deviation line (red line) and both indicators intersect with a Djinn prediction date a buy is triggered. This trading strategy works on daily, weekly and Monthly Djinn Predictive charts. This is not trading advice. Trade at your own risk.
CBOT:ZS1!
by Dinjin
2