Thursday, October 27, 2011

Morning Market

The SPYs rally continues.  Notice there are now two price clusters (see arrows) where -- after rising -- prices have consolidated their gains using the 110 day EMA as technical support.  The EMA picture continues to be positive and the last two days have seen a small bump in volume.  UPside resistance is a it below 126 while support is coming from the 200 and 10 day EMA.

Interestingly enough, the IEFs have not fallen from their center of gravity at the 50 day EMA.  Instead, prices and the EMAs have formed a "barbed wire" situation where the candles and prices are caught in an inter-twining situation.  Support is right around the 125.25 area -- a move below there in combination with a move higher in equities would confirm the equity's rally.

Corn is still in a fairly wide trading range/consolidation pattern between 600 and 800.  What's interesting to note is that while other commodities took a big hit during the risk off trade of the last few months, corn didn't move lower, indicating there is still a very tight supply and demand issue.

In contract, soy beans -- which were in a trading range between 1250 and 1450 -- recently fell below that range with 1250 not becoming resistance for this market.