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Soybeans Reaffirm Base/Reversal Count; Define New S-T Bull Risk

Posted 12/16/2019 7:59AM CT | RJO Market Insights

Fri’s break above 09-Dec’s 9.04 initial counter-trend high confirms our bullish count discussed in 09-Dec’s Technical Blog and leaves Thur’s 8.88 low in its wake as the latest smaller-degree corrective low the market is now minimally required to fail below to break this month’s intermediate-term uptrend from 02-Dec’s 8.67 low.  Per such this 8.88 level is considered our new short-term risk parameter from which shorter-term traders with tighter risk profiles can objectively rebase and manage a bullish policy and long exposure from 8.95 OB recommended in 09-Dec’s Technical Blog.

Former 9.04-to-9.02-area resistance, since broken, is considered new near-term support.

The market’s obvious and total rejection of the extreme lower recesses of the past five months’ 9.60 – 8.65-range shown in the daily log chart above amidst the return to historically bearish levels in our RJO Bullish Sentiment Index and the Bullish Consensus (marketvane.net) shown in the weekly log chart below reinforce our bullish count and 02-Dec’s 8.67 as the key risk parameter this market is now required to fail below to negate this bullish call.  The market’s position still deep within the middle-half bowels of the 5-month range basis the Jan contract and still capped by this year’s major resistance between 9.30 and 9.46 on an active-continuation basis precludes us from concluding a resumption of this year’s base/reversal count to potentially huge gains above 9.50.  But until and unless this market weakens below at least 8.88 and preferably 8.67, we would be foolish to ignore or discount such 9.50+ upside potential given historically bearish sentiment levels that warn of a vulnerability to higher prices.

These issues considered, a bullish policy and longs from 8.95 OB remain advised with a failure below 8.88 required to threaten this cal enough tom pare of neutralize exposure commensurate with one’s personal risk profile.  In lieu of such weakness, further and possibly accelerated gains straight away should not surprise.

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