SoyBeans (ZS1!) LONG; Long term BUYCBOT:ZS1!
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Looks like it's headed >$15000, rather relentlessly.
This very well could get up there something like this;
Soybeans
Visualisation of diversification This is what your portfolio should look like. Then you will Always have some assets that gain when others lose and whenever something has crashed and started to turn around, you can just sell the assets that have gone well under the same period and buy more of the assets that have crashed.
Grain and oilseed markets summary 12/14Today we discuss how the grain markets weekly opening day closed and risk levels where our trades get invalidated
Week 50: Short Opportunity on ZSF 2021Weekly analysis for ZSF2021
Week 50: 07 December to 11 December 2020
Following up last week analysis, the Resistant level at $1,200 remained in tact and our key level at $1,161 had been penetrated.
Therefore, now we are looking to sell as the direction had changed.
Here is my personal trade call for this week :
Short now or Sell Stop at $1,154.00
Stop Loss (SL) is at $1,175.00
Take Profit (TP) is at $1,083.00
It gives us 3.47R
Disclaimer :
The analysis above for educational purposes only, I do not responsible for your losses. Please adjust your own lot-sizing according to your appetite.
If you are benefiting from my trade opinion, please buy me coffee.
As always, move your SL when you are in the profit zone.
Soybeans: Trending up, buy on dips...I think we have a nice setup to buy the dip in Soybean futures or using $SOYB. It's a rather big contract, so keep that in mind if trading futures.
There's a long term trend signal active, for many more months still, so any dip is a buy if you're patient enough.
I highlight a trend that reached its peak in the daily timeframe here, so, a retracement entry is likely to materialize in the coming days and weeks.
Keep an eye on it, don't miss out on the big gains to be had in this market.
As @timwest pointed out, fundamentals for Soybeans and the long term chart are ridiculously bullish now, so, it is going to be very hard to hold on to positions for long enough to reap the benefits, and specially hard to join the trend for most people. The droughts in Brazil are affecting crops, and there's a huge demand from China, since the soybean producing regions were affected by floods recently, there's also a big need for soybeans to produce pork in South America, like the huge farms they are setting up in the South of Argentina.
As a bonus, if the US wants to hurt China, their best bet is to make the food prices go up, specially Soybeans. They had been buying commodities for cheap for a long time until now. That might be changing already, and considering the expectations I have of rising inflation and interest rates, in a post Pandemic world, this is further fuel for the fire in this rally here.
Cheers,
Ivan Labrie.
Week 49: ZSF 2021 Still bullishWeekly analysis for ZSF2021
Week 49: 30 November to 04 December 2020
Here is the playbook for Week 49, overall it is still Bullish.
(a) Currently on H4, the price is forming a bullish flag with $12,000 is the current Resistance Level.
(b) It may not be a straight forward bullish; the real key level is at $11,161.50 (area).
What does this mean?
(1) If the price make a clean break on $12,000 then we put a Buy Limit at $12,000 area
(2) If the price just make a shy break on $12,000 level, then we are expecting either a False Breakout or another price compression.
(3) If the price cannot break $12,000 it is still Bullish, don't get trapped by thinking that the trend has changed. The direction is only changing after the price enters $11,161.50 and below.
Therefore, overall this week is still bullish bias; take a rational decision, don't get emotion involved.
Disclaimer :
The analysis above for educational purposes only, I do not responsible for your losses. Please adjust your own lot-sizing according to your appetite.
If you are benefiting from my trade opinion, please buy me coffee.
As always, move your SL when you are in the profit zone.
Soybeans - Short IdeaI have "bean" watching Soybeans for sometime now. I see price has entered an area of resistance, has hit a whole number of $12 and my heatmap indicator is showing divergence.
Price has fallen through my trendline.
I will be going short.
On the daily charts, a couple of shooting stars are present.
Enjoy!
Week 48: ZSF 2021 No sign of weakness, key level is at $1,150Weekly analysis for ZSF2021
Week 48: 23 to 27 November 2021
From 1st June 2020 until today, Soybean prices has been very (strong) bullish, especially in November.
On the weekly Time Frame we can spot the decision level is at $1,150, however from the current price is still quite far.
There is no sign of reversal yet, even on Daily chart, momentum still slower, sporadic with some keen buyers trying to push the price higher.
Practically we have not seen any strong Sellers come to intervene, perhaps just like us and other traders, we just wait and see on how high the price will go.
It is wiser to wait, observe and we enter when there is a firm confirmation on the price.
No trade call this week, risky to long and not wise to short now. Stay Calm and enjoy the Black Friday shopping.
Disclaimer :
The analysis above for educational purposes only, I do not responsible for your losses. Please adjust your own lot-sizing according to your appetite.
If you are benefiting from my trade opinion, please buy me coffee.
As always, move your SL when you are in the profit zone.
Soybeans - Watching.Weekly Chart
I'm watching this chart for a fade in the future. A serious run up, caught some upside on this one. previously post.
Week 47: ZSF 2021 Short OpportunityWeekly analysis for ZSF2021
Week 47: 16 to 20 November 2021
After a long rally, retracement was formed (in a mini down trend channel) and it broke to fill the Supply Zone.
There two ways to trade this formation:
(a) Aggressive Mode
Solely based on the Price Action and we can reap better Risk Reward Ratio by sacrificing a small risk.
Sell Limit at $1,153
Stop Loss at $1,160
Take Profit at $1,124
RR = 4.14R
(b) Conservative Mode
We wait for the confirmation to enter, it is a very safe trade with a decent ratio.
Sell Stop at $1,139
Stop Loss at $1,152
Take Profit at $1,124
RR = 1.31R
Use your own judgement and risk factor to decide.
My personal opinion, this week ZS will have a rather big movement and from there it will be many ranging days ahead.
If you are familiar with "Cancan Setup", you may know what I am referring to.
Disclaimer :
The analysis above for educational purposes only, I do not responsible for your losses. Please adjust your own lot-sizing according to your appetite.
If you are benefiting from my trade opinion, please buy me coffee.
As always, move your SL when you are in the profit zone.
Week 46: ZSF 2021 Buy at retest levelWeekly analysis for ZSF2021
Week 46: 09 to 13 November 2021
Market was pushing the price higher and made a new Higher High last week.
The Head and Shoulder formation was not happening, on Friday the momentum was slower and today not much happening too in Asian session.
Overall trend is still bullish, but don't jump to the band wagon now; we better wait at a retest level to long.
My personal trade call for this week :
Buy Limit at $1,084
Stop Loss at $1,061
Take Profit at $1,130
RR = 1.92R
Special note :
As there is no reference on the Take Profit, we do not know how bullish it will be.
My advise, watch for the Price Action in H1 and H4; they will give you an early warning whether to close manually or let it ride.
If I happen to watch it, I will update it here on comment section.
Disclaimer :
The analysis above for educational purposes only, I do not responsible for your losses. Please adjust your own lot-sizing according to your appetite.
If you are benefiting from my trade opinion, please buy me coffee.
As always, move your SL when you are in the profit zone.
Week 45: ZSF 2021 Consolidation PhaseWeekly analysis for ZSF2021
Week 45: 02 to 06 November 2021
Overall, this week I am very bearish bias.
There are two spots of level which give us a good profit ratio:
(1) Sell Limit at $1,065
(2) Sell Stop at $1,035
There is no trade call today (this week), just a few guidelines:
a. If you are shorting now or still haven't closed your trade from last week position, the best Take Profit level is at $1,036
b. If you are looking to sell, wait for the price to breach $1,035 or bounce to $1,065 or split your lot size with heavy on top.
c. Stop Loss is at $1,067 (close all your short positions if the price is closed at this level or higher)
d. Take Profit is at $1,000
e. Last advise, keep in mind that now the price is forming the head, it needs to form the right shoulder before going down.
Disclaimer:
The analysis above for educational purposes only, I do not responsible for your losses. Please adjust your own lot-sizing according to your appetite.
If you are benefiting from my trade opinion, please buy me coffee.
As always, move your SL when you are in the profit zone.
Week 44: ZSF 2021 Bullish compressionWeekly analysis for ZSF2021
Week 44: 26 to 30 October 2021
Soybeans is persistently soaring higher and higher, there was no sign of slowing down.
Even today, there is no strong seller sighted yet; looking at from the momentum movement, the market may show a sign of deceleration.
However, until we see a Strong Seller, then we can say that the momentum has changed direction.
Actually I won't rush to sell, because the data is not complete yet.
The only reason I will place a Pending Sell Order, it's because of the compression shape, or commonly known as ascending wedge.
Again, this is a risky trade, no reference to the left and let's speculate. We have a good RRR for this trade.
My personal trade call:
Sell Limit: $1,082
Stop Loss: $1,090
Take Profit: $1,047
Risk Rewards Ratio: 4.67R
Disclaimer :
The analysis above for educational purposes only, I do not responsible for your losses. Please adjust your own lot-sizing according to your appetite.
If you are benefiting from my trade opinion, please buy me coffee.
As always, move your SL when you are in the profit zone.
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
Soybean & Wheat Forecast // Pronóstico para Soya y Trigo**No Advertising nor financial advisor**
Soybean and Wheat Forecast using Elliott Wave Theory.
Potential 4:1 riskReward until 21st of december.
//
Trigo y Soya pronosticados gracias a la teoría de Olas de Elliott.
Potencial de 4 a 1 en Riesgo/Ganancia hasta antes del 21 de diciembre 2020
Week 42: How high can it go?Weekly analysis for ZSX2020
Week 41: 12 to 16 October 2020
This is the second time for ZSX2020 flying into the unknown area.
Normally in this scenario, I will long at the RBS area; however, now it's a bit late for that.
How high can it go? we do not have the data, again, it's best to wait and see until the price dives below $1,047.
This week no trade call, just watched and we can focus on forex or other asset classes.
Disclaimer :
The analysis above for educational purposes only, I do not responsible for your losses. Please adjust your own lot-sizing according to your appetite.
If you are benefiting from my trade opinion, please buy me coffee.
As always, move your SL when you are in the profit zone.
Week 41: Quick short on ZSX 2020Weekly analysis for ZSX2020
Week 40: 05 to 09 October 2020
So far the price failed to make a Higher High and still lingering at $1,020 area.
Based on the Price Action, it is now a good sign to do short.
Should the price dropped lower than our Take Profit level, then we anticipate the price will go below $1,000 next week.
My personal trade call:
Sell Limit: $1,019
Stop Loss: $1,029
Take Profit: $1,003
Risk Rewards Ratio: 1.62R
Disclaimer :
The analysis above for educational purposes only, I do not responsible for your losses. Please adjust your own lot-sizing according to your appetite.
If you are benefiting from my trade opinion, please buy me coffee.
As always, move your SL when you are in the profit zone.
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
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.
Week 40: ZSX 2020 Bullish resumptionWeekly analysis for ZSX2020
Week 40: 28 September to 02 October 2020
After a long rally, market needs to take a breathe before continuing the journey to the North.
Your question would be, this time how high the price will be?
As a trader, we do not speculate, but we react based on the price movement.
Let's put it simply, if there is no Higher High (HH), then we anticipate the price will go lower next week.
If there is a HH, then the trend will continue.
This week, we wait until the price reach to our last week Take Profit point, that's where we will LONG ZSX2020.
My personal trade call:
Buy Limit: $991
Stop Loss: $980
Take Profit: $1,020
Risk Rewards Ratio: 2.51R
Disclaimer :
The analysis above for educational purposes only, I do not responsible for your losses. Please adjust your own lot-sizing according to your appetite.
If you are benefiting from my trade opinion, please buy me coffee.
As always, move your SL when you are in the profit zone.
