There was follow through selling on the electronic overnight which set the low for the day @ 62.15 which represented 50% retracement and was able to create a technical buy signal that supported the market. Once the low was established, the local shorts started to cover and there was a push for higher prices which ran into scale up selling above 63.50.
The market traded in a fairly narrow range all day as the grains started to rebound as well, but the stock market slipped under 14,000. Volume in options and futures were strong with almost 25,000 contracts in both as the market looks like it wants to move sideways short term until more information is available.
The export sales report tomorrow is not expected to set any records, but expect that most traders are waiting to see the USDA report next Friday. Cert stocks continue to grow and open interest falls as the grain and cotton markets are still uncertain if this is the place to buy or there may be a better opportunity later. Dollar continues to find support as the CRB index weakens which may lead to more scale up trade selling and a test of the 50% retracement level down the road.
Technically, the market has started a downside trend channel, we managed to find good technical support at the 50% retracement and 50 day moving average. This may lead to a test of the highs short term, but there should be good scale up trade selling above 64.00. Unless the market can break through 65.00, which would represent the top of the new downside trend channel, we will probably be making another test of the 50% retracement level.
If that occurred and we broke the 50-day moving average as well, we may be testing the 60.00 cent level in the near future. The outside markets will be key and how aggressive the specs behave in the short term.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
