SJC1! trade ideas
Week 14: ZSK2021 Uptrend Channel before it dropsSorry for the late post .. let's get to it.
Based on the price movement last week, here is what I saw:
(1) Strong bullish movement driven by the news, but it still did not break the previous High.
(2) The Seller is pressing the price down from the top (Thursday, 01 April 2021), it shows that $14.44 is holding it's level.
(3) As indicated last week, my support level is now at $14.10
From here, I am expecting some consolidation in the form of uptrend channel until the price is making a Lower High; then it is time for us to Short the market.
This week my Pending Order:
Sell Limit at $14.35
Stop Loss at $14.51
Take Profit at $13.90
Risk Reward Ratio: 2.66R
Let me know if you have other opinions, we can discuss it in the comment sections.
What's with these high Soybean Prices?!Soybean futures have been trending higher since reaching a low of $8.0825 per bushel in April 2020. The rally intensified when the price rose above the $9.50 level in late August. The move over the February 2018 high and critical technical resistance level at $10.71 in October set the oilseed futures on a path for beans in the teens for the first time since 2014.
After trading to a high of $14.60 on the May contract on March 8, May soybean futures pulled back below the $14 level to a low of $13.6425 on March 30. The very next day, the beans exploded in the most significant rally of this year. May futures moved over 90 cents higher from the March 30 low to the April 1 high before pulling back to the $14 level.
In any commodity, trading ranges tend to widen as the price appreciates. In soybeans, we are now going into the 2021 crop year as farmers will be planting the seeds that feed the world this month. Last week’s rally came as the US Department of Agriculture surprised traders with their planting forecast.
The USDA planting report lights a bullish fuse
On March 31, the USDA reported that farmers plan to plant soybeans on 87.60 million acres. While the number was higher than the USDA’s 2020 intentions of 83.51 million, it was far lower than the average trade estimate of 89.996 million acres. The USDA also said that farmers would plant 91.144 million acres of corn, below the average trade estimate of 93.208 million. The report lit a bullish fuse under the soybean and corn futures markets, pushing corn to a new and higher high at $5.85 per bushel on April 1, the highest price since July 2013.
Meanwhile, the continuous soybean futures contract rose to a new marginal high of $14.5625. The last time the beans reached that level was in June 2014.
The buying runs out of steam- Backwardation in the beans
After reaching the most recent high, soybeans moved back to the $14 level at the end of last week.
As the daily May futures chart highlights, beans rose to a new high on the highest volume of 2021 when over 410,000 contracts changed hands. The move had all the hallmarks of a short-term blow-off top in the bean futures arena. Farmers likely used the rally to do some hedging. Source: Barchart
May soybeans settled at $14.02 per bushel on April 1. The new-crop November contract settled $1.3825 lower at $12.6375. The backwardation or discount between beans for nearby delivery and for the new crop that is going into the ground reflects both nearby tightness and optimism that the 2021 crop will satisfy the ever-growing demand for the oilseeds, which could be a leap of faith.
Expect lots of volatility as we are now at the start of the season of uncertainty
The soybean price during the fall harvest will depend on the weather conditions across the US’s fertile plains. A drought or any other event that interferes with crop progress over the coming weeks and months could push prices far higher. In 2012, drought conditions moved nearby soybean futures to an all-time peak of $17.9475 per bushel.
The next levels of long-term technical resistance in the bean market stand at the May 2014 $15.3675 high and the July 2013 $16.30 peak, which is the gateway to a challenge of the 2012 record high in the oilseed futures.
Any weather problems that interfere with crop progress could potentially push beans out of the teens, on the upside for the first time.
Meanwhile, one of the critical factors for global soybean demand is China. The Chinese are rebuilding the hog population, which requires soybean meal, the primary ingredient in animal feed. Reports of another outbreak of African Swine Fever could weigh on the demand over the coming months. Meanwhile, if the Chinese turn out to be significant buyers, we could see a continuation of the rally that began one year ago, even if the US crop is robust.
Expect lots of two-way volatility in the bean market over the coming weeks and months as we enter the 2021 crop year. Price volatility can create a nightmare for producers and consumers looking to control costs. However, high levels of price variance are a paradise for nimble traders with their fingers on the pulse of markets.
Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading.
Week 13: ZSK2021 Wait for a Support BreakLast week the highest price was just at $14.35 ... just a shy $0.05 away from our bomb shell.
Anyway it was not triggered and it keeps going down after reaching $14.35
The market was closed at the SR Flip area at $14.00 (see on H4), it was doji and so far no buyers sighted in the market (Asian morning session).
Here are the few scenarios :
(1) Market bounce at SR Flip ($14.00), likely it will find the previous level which is at $14.09
If $14.09 is broken, it means the buyer is back in the market.
(2) The price continues going to South, the last buyer defend was at $13.90 level. This is where we can place our Pending Order (Sell Stop); once it broke, the gravity will help to pull the price going even lower.
(3) Certainly, the last scenario is ranging / sideways; this usually happen towards end of the month or a week before WASDE report release. The price may consolidate prior making a big move.
This week, I will go for scenario #2 where I will place a Pending Sell Stop Order.
Stop Loss is at $14.20
Pending Order (Sell Stop) is at $13.90
Take Profit is at $13.22
RRR: 2.27R
If you are well versed in Price Action, we can take the opportunity to scalp during the week.
Have a good weekend ahead, this week is a short week.
If no clear setup, just avoid it, enjoy your Easter holiday.
Week 12: ZSK2021 Ranging with a slight bullishLast week our target at $1440 had not been achieved, the price went down and made a retracement at the end of the week.
Overall it is not a Sell yet, we are still within Buyers area ($13.90 to $14.24).
The immediate Decision Point (DP) is at $14.24 where if it breaks, then we anticipated that it will go to our $14.40 level (which we will sell).
If it doesn't break, then it will range within the buyer area.
My view remains the same as last week, we look for the opportunity to short and feel free to scalp it while it is ranging.
If you have a different view, let's discuss it at the comment area below.
Practice Labeling Initiative and Responsive Price Action.Rounding out Chapter 1 of the book "Price Action Breakdown..." I am asked to label moves as initiative and responsive based on how the author has described initiative and responsive. From his perspective initiative is when buyers/sellers decide that price is no longer agreeable and take the initiative to move it up or down, hence the name initiative. Responsive is when price pokes out of a Value Area only to come back into it abruptly (see excess price/tails).
Another way to think of this would be trend continuation moves vs movement back towards control point. This lesson didn't really hit home for me. I still think the point of control is the most valuable bit of information I have gleaned from this book so far, but I am waiting to hear how the author will work initiative vs responsive into the context they are building. I can definitely see why traders are comfortable in the value area. Trading the initiative moves makes me feel like I'm about to get on a terrifying carnival ride and there's nothing to hang on to.
That'll do it for today.
Inflation trade: Bulls leading battle of attrition on bearsThis is the type of inflation that the masses ignore, that happens while they cheer at Chavez stimulus checks.
Look at images of Venezuela 15 years ago, so many smiles, so happy crowds.
While Germans were carrying buckets of cash and starving actually farmers were doing pretty well, they profited greatly.
Probably for similar reasons the clueless revolutionaries in Russia called them "bloodsuckers". How outrageous they profit while others suffer oh no!
All is their fault, not the people actually responsible.
But what the cheering average people worrying about their day to day lives don't see is the worst type of inflation: basic goods prices go up, production goes down.
Hurray, everyone gets more "money", everyone gets more pointless pieces of paper, great, I will finally be able to afford, checks notes, nothing at all.
There is LESS STUFF for everyone. These people, especially the urban ones, they live in fantasy land, I've seen some of those cretins say supply and demand is a myth.
WAT? That's so dumb, boy are they about to learn their lesson.
It is an endless circle. Prices go up, prod goes down, there is less stuff, people push prices up, prices go up, prod goes down, and so on.
Maybe reptilian brained people panic fight each other for toilet paper and pasta again? Rubs hands.
Few eat soybeans, only california millenials from what I hear, what it is used for is feeding domestic animals, not the friend kind, the food kind, soybean gets turned into milk, steaks, pork chops, bacon and beef jerky and all those industrial products made from meat that americans eat like candy. Americans have a ghrelin disease, they get ravenously hungry they'd kill to eat buckets of food.
Also the situation in Argentina not getting better, farmers waging war to the socialists.
The weather is really dry in Argentina, these big bags of beans could catch fire very easily, damn it would be a shame if they started to burn (again).
The freezing cold weather did not help, other producers are rekt because of cold & wet. Who else is heavilly impacting this?
The big buyers in the far east have stocks but they'll have to buy eventually hehe.
In this inflation env, any negative event will push the price up anyway, and "positive" event will just make it pullback or sideways a bit, maybe only slow it down.
I think the price will chop chop a bit on its way up, chop chop not as hurry up I mean go back and forth :p, then bears will break and it will slide vertically. To ~17$, which is a very special price you know.
Week 11: ZSK2021 Bull last pushThis week, especially today (Monday), is a good day to scalp until the price reaches $14.40 area.
Personally I will wait to sell once the price is at Seller area as I am aiming to have a good swing trade.
Here is my setup:
Sell Pending Order at $1440
Stop Loss at $1464
Take Profit at $1322
RRR = 4.87R
Let me know if you have a different idea, we can discuss it in the comment area below.
Have a good trading day ahead.
Week 10: ZSK2021 Bullish Ahead, wait for a retracement.Based on last Friday closing, I would expect the price to be bullish to $14.43 and making a retracement there.
However, I was proven wrong, the market gap up and push the price higher than $14.43
There is no more references that I can use as there is no data on the "left"; the only way to read the market is only by reading the Price Action.
I did some research on historical data and found that the highest price for SoyBeans was $17.6825 (03 September 2012).
If we are studying those data, there is a potential reversal at $16.50 where it was a strong resistance level created in July 2008.
Having said the above, we are not here to predict but to trade.
Our short-term observation:
(1) The price is on the upper-band of trend channel, either it will break or continue to range.
(2) Looking at the current movement, I don't think the gap will be closed that fast; the impulse movement upward was so strong and normally it will become a good support zone (area to buy).
(3) I left my line at $14.30 as a buy area marking.
Additional info which I mentioned above:
www.macrotrends.net
If you have other views or opinions or ideas, let's discuss it on the comment below.
This could be the final push of Soybean!We need to closely monitor Soybean in the next few weeks.
I think the target could be at 1660, but it needs to fully push through the weekly supply zone at 1535. This weekly supply zone, however, is no longer fresh and could easily be broken.
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There is an ascending triangle formation on Soybean(commodities).
There was a strong bullish sentiment before. So this formation may become a confirmation of trend continuation.
According to Elliott Waves theory Wave D is done and the price is heading to Wave E.
So follow the chart and look for the breakout.
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And always remember: "we don't predict, we react".
Week 09: ZSK2021 Price is consolidatingThis week 09, we will be using ZSK21 as a chart reference.
There are few things that I would like to share:
(1) This morning the price was continuing the rally and created a gap upon opening. Price gap normally is closed within a day or two; so for a speculator, you can use this opportunity to short it.
However, please be aware that the overall trend is still bullish, if you are shorting, be mindful that you have to act fast.
(2) Overall the price still has no direction and it will be ranging from $1,405 to $1,427
(3) I will be interested to sell if the price penetrated $1,384
I will update again in mid-week if there is a sudden change on the outlook.
Sell Soybean futures (MAY 2021)Sell from 1433 and 1546, stop 1635.25, target 794
Transfer of sales from the previous contract (MARCH 2021)
Everyone and their Dog should be Long SoybeansNov WASDE was the Gasoline to this fire, Soybean have been trending up for quite some times.
Managed Money Long is breaking record every week and we should not be surprised by this massive amount of fund buying the world, Global QE = Excess Money Flow.
Not much telling with technical unless you go back 10y.
Upside in the Mid Teen's if La Niña materialize in South America
Week 08: ZSH2021 Wait for a break to SellPatience is one of the key traits in trading.
Last week we did not see much action, the price is ranging in a tight movement 20.4 points for a whole week.
This week we are still waiting for a confirmation to short the market:
(1) Price level at $1,390 is being respected and currently creating a "fake out" line.
(2) My reversal zone remains at $1,400 (for now)
(3) The sign of going down will be confirmed when $1,370 is broken.
Overall, my view remain bearish with the following trade plan:
Sell Pending Order at $1,400
Stop Loss at $1,410
Take Profit at $1,322
RRR = 7.8R
I will monitor on daily basis too, shoot me a question if you need any clarifications or exchange ideas.
Week 7: ZSH2021 Let's wait to SELL againMy overall sentiment is still Bearish bias .
Today the opening price jumped 14 points and the bull kept running to the nearest Supply Zone.
In general view, the seller is still strong and therefore, we participate in selling too.
The nearest SELL area is between $1,395 and $1,400 (5 points zone), with a Stop Loss at $1,411.
Our first Take Profit level is at $1,375 (2.27R).
What if the price did not hit the Supply zone at $1,395 - $1,400 ?
Then we have to see the Price Action movement and market structure. Good Luck!
Week 6: ZSH2021 Price is in the sell areaFollowing up last week analysis, the price will be visiting Supply area prior going down.
My personal Sell Order will be at $1,417 (it depends on the price action in the next 2-3 H4 candles, I may short it early too).
The stop loss will be at $1,438 (New Higher High) and our Take Profit will be quite low (at least $1,275).
The simple sign will be at $1,417 area, if the body size of the candles are not prominently bullish; and there is a formation of Lower High (LH); I will go at whole-nine-yard to short the market. Just kidding, money management is still important, perhaps 10% to 20% equity to short this opportunity.
Soybeans (March21) have a decision to makeMarch Beans – Daily: Beans have been consolidating into a symmetrical triangle. You can see at the right there is a high amount of volume in the current price range. A break below would target 12.09. A break above, would first test the 13.95 area and then the 14.36 high. A move above 14.36 would then target the 16.60 area. Bull’s, re-read that. First need to take out 13.95 then the 14.36….
Watch for high volume on breakout moves and be careful on any fake outs.
Week 05: ZSH2021 Short Term BullishOn H4, the price has broken the down trend channel and making a Higher High.
From 27 January to date, the price movement is forming another flag on the higher band; also, to add some confluences, if we observed the Price Action on the candle stick, there were some rejection to go down.
Based on the above, I think the price will pick up some liquidity at $1,417 area prior going down.
Short term (1-2 days) will be bullish as we are still in bullish flag area.
