Soybean Tech Update

By any normal account yesterday’s 30c decline in beans should’ve been detrimental to the technician. Prices followed up a post report reversal by dipping to a four sessions low and finishing sharply on the defensive. That type of setup is text book for follow through selling. So what happened today? Prices gained double digits, scoring highs late in the session, with volatility gaining. An interesting follow-up to Monday. Let’s take a look.

What could have been a poor outcome for the chart today if selling pressure continued can actually be spun pretty favorably now (at least for tonight). Despite a market 48c off its post-report high, down 30c yesterday, and deeply overbought, we saw zero follow through overnight. Zero. By holding yesterday’s low the upward trend stays intact with even the fastest exponential day moving averages still below the market. Monday’s low with the 12-day exponential moving average in the 1031-1035 area now becomes a tipping point for the week.

Today’s action might only be a dead cat bounce, but what should have been a confirmation selling day instead saw sharp gains. This will keep the bear a bit more uncomfortable at least for tonight. Obviously if beans make new weekly lows we’ll confirm the dead cat theory making any close below 1031 key for both camps through Friday. Until then we’re left arguing Monday’s shakiness against Today’s resilience. Stay tuned.