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September SOYBEANS 1997
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7/27/97, Sunday
Greetings Traders.
There are many excellent opportunities coming this week in the Futures
markets, so I thought I would share one such opportunity that might suit
your fancy.
September Soybeans have been providing an interesting topic for some
weeks now with talks of drought, heat and then rain. Fundamentals
abound. Yet how about the technicals?
The top made on 7/15 was not higher than the Fdate top made 6/24. This
keeps us in a bearish mode looking only for shorts. If you read my
recent posted article on how to trade with time days, you'll understand
why I will only look at the short side of this market.
This recent climb must exceed our last high made 7/15 for me to change
my bias. Therefore I'm looking for resistance somewhere to short this
market.
Using a recent formation into the calculator, I've come up with these
resistance prices shown below:
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(FIB) Formation - October Soybeans Target Date: 7-25
Formation Dates : 7-2 7-15 7-21
Formation Prices : 607.5 681.5 631
Target Date Levels: L1-658.76 L2-672.88 L3-685.50
L4-699.37 L5-718.56 L6-755.50
Fib Range Levels : 650.29 656.25 662.21 669.58
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I direct your attention to resistance Level one (L1) @ 658.76. This is
just barely one cent off from our high for 7/25, which is the day we are
solving for if you will notice after 'Target Date:'.
The prices of 7/25 are High- 660.00, Low- 653.50, Open- 654.00, Last-
654.50. Having this market close below one of our range levels as shown
above @ 656.25 also gives some weakness indications. The next resistance
level on the upside is 662.21 as shown in the Range levels area. This is
confirmed with the Range calc shown below.
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TTC ver 2.3 - FIBONACCI RANGE LEVELS CALCULATOR
Last Close Price: ( 654.5) Range Prices: (681.50)-(631)
Top Extension Levels Within Range Levels Bottom Extension
Levels
706.75 681.5 619.082
700.791 669.582 611.709
693.418 662.209 605.75
656.25
650.291
642.918
631
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We are interested in just the 'Within Range Levels' since the extension
levels mean we've crossed either the top or bottom of the previous
range. If it were the top, of course I would not be looking to go short
as mentioned previously. If crosses the bottom, I'm looking for where I
might exit my profitable position. But we need to enter the trade first
'Within' the past range since this is a rally we are looking to short.
In the 'Within' column, we note some areas where we can place a exit
stop in case our 660 top is violated. Note the next level up again is
662 and a quarter. So somewhere above 662 may suffice. My expectations
is for this 660 area to hold as our top and to start moving down. We use
662.25 as our last chance area. Above that we don't want anything to do
with this market because it may be telling us it may want to take a
different path for awhile. We won't argue with the train, just get off
the tracks.
Your risk tolerance should define your entry price. $500 is 10 cents, so
with a stop at 663, you may wish to place an order for 653 or better
before the market opens. If each hundred you wish to reduce risk, you
will narrow your entry window and of course risk not even getting into
the trade. This each must do for himself. Another option is to have real
confidence that 660 is our top as shown by our L1 level, and then lower
your risk to $300 entering at 654 or better, which is where it closed
Friday 7/25. Many options to choose here.
First objective is to reach 631 bottom. Need to break below it to
continue in a short mode. Failure to do so will provide a higher low and
the beginning of another short term trend or a CONTRACTING MARKET. A
another subject altogether.
Okay, I made the first move and now welcome all to post your take on
this market, pros and cons, moms and dads, etc. :)
cheers!
:)
rick
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