Toggle Mar Bean Directional Biases Around This $0.50-Cent Range

December 28, 2016 2:24AM CST

Yesterday's bullish divergence in short-term momentum above 21-Dec's 10.23 high in the now-prompt Mar contract leaves Fri's 9.97 low in its wake as one of developing importance and the end of at least the decline from 16-Dec's 10.48 high.  Given the 3-wave appearance THUS FAR of the decline from 06-Dec's 10.71 low however, we cannot ignore a broader bullish count that contends this 3-wave sell-off attempt is a mere correction within a broader BASE/reversal environment that dates from 31-Aug's 9.46 low close.

IF such a broader bullish count is to remain intact for longer-term players however, the market has two near-term hurdles it needs to overcome:  mid-Dec's former 10.30-to-10.35-range support-turned-resistance and that 10.48 corrective high and short-term risk parameter from 16-Dec. Conversely, to more severely threaten or mitigate our longer-term bullish count introduced in 27-Oct's Technical Blog , the market needs to resume the past month's slide below Fri's 9.97 low and new key risk parameter. In effect we believe the market h as defined 10.48 and 9.97 as the key directional triggers heading forward.

Soybeans 60 min

Soybeans Daily

The extent of the past month's sell-off is not unimpressive.  But relative to a full three months worth of uptrending prices from 31-Aug's 9.46 low shown in the daily close-only chart above, this setback falls well within the bounds of a mere correction THUS FAR.  Resumed weakness below Fri's 9.99 low close (or 9.97 intra-day) will tilt the longer-term directional scales south and threaten or defer our preferred broader bullish count. Additionally, the market's current position pretty much in the middle of the middle-half of this entire year's range cannot be ignored as fertile ground for aimless whipsaw risk. The current 50% reading in the Bullish Consensus ( measure of market sentiment suggests the masses are calling this market a coin flip and are not committed to either direction.

Soybeans Weekly

Soybeans Weekly

From a very long-term perspective we continue to believe that Nov'15's 8.44 low ENDED the secular bear market from Sep'12's 17.89 all-time high and that the market has been in a major base/reversal process ever since.  This said, such major base/reversal processes can include QUARTERS of frustratingly aimless, lateral, choppy price action as the two previous examples (2009-10 and 2005-06) circled in blue below show.  From this long-term perspective the $0.50-cent range cited above seems almost laughable as a "key" directional pivot.  What this long-term view DOES provide is perspective and that this current environment is a challenging one that continues to call for a more conservative approach to risk assumption . We do not believe that anyone's going to be hitting home runs here. Rather, traders are advised to focus on identifying smaller-degree risk parameters and be content with trying to hit singles , with the occasional one that finds the gap and provides a bigger winner.

Theses issues considered, shorter-term traders with tighter risk profiles remain OK to maintain a cautious bearish policy with strength above 10.35 threatening this call and further strength above 10.48 negating it and exposing a run to new highs above 10.71.  Longer-term players remain advised to maintain a cautious bullish policy with a failure below 9.97 threatening this call enough to warrant moving to the a neutral/sideline position.

Soybeans Monthly

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