The weekly soybean chart we’re featuring this week is a great example of a market’s ability to respect and repeat history. And to me, that’s what charting and technical analysis is all about. I like to look for historical patterns that may indicate a potential market move in the future. They don’t call ‘em futures for nothing! When I look at this chart, the first observation I make is that the market has been trading in a fairly consistent trading range for almost 3 years. It also appears that this 3 year price action has some similarities to the patterns created back in 2008 through early 2010. You can see the volatility was greater back then. This volatility was exemplified by broader weekly ranges and higher highs and lower lows that were basically 75 cents greater than the past 3 years. Remember, we are looking at patterns or price tendencies. It isn’t an exact science. The reason I go through this exercise is to give you potential price targets. These targets can be useful for both the hedger and the speculator. The important point is the market held at $9.00. If the market maintains this pattern, we should be able to rally to $10.60 to $10.85. Weekly closes over $10.85 would suggest the potential for a leg extension to $12.11 and so on. I’ve been staring at charts for 37 years. I hope my vision gives you The Edge!
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.