Thursday, August 23, 2012

Morning Market Analysis

The entire grains complex is still at elevated levels.  Corn (top chart) broke through resistance, but printed a hanging man bar yesterday (which many traders take as a reversal pattern).  Soybeans (middle chart) has a similar chart to corn, although there were a few days of pretty solid gains.  Wheat (bottom chart) is still in a downward sloping pennant pattern.

The reason for these high prices is the worst drought conditions since the late 1980s. 

The longer term chart of the British market still shows a sideways consolidation pattern in play.  Prices are still a bit above the 200 week EMA with a rising MACD.   But the CMF shows declining market participation.  Also note the declining volume as prices have rallied over the last few weeks.

Last week I noted that the Spanish market may be making a bottom, based on the possibility of a classic double-bottom pattern.  Now the market has rallied from its bottom. , moving through resistance around the 25 price level.  However, this is more of a technical bounce than anything else.

In the same post, I noted the Italian market was in a similar situation, although I wasn't as confident with the overall pattern.  Well, it, too, has rebounded in a similar manner.