What’s Up, What’s Down: Stock Indices Have Key Reversals in Place

Comments for Wednesday, October 7, 2009

Looking Ahead to Today by Reflecting Back at Tuesday’s Price Action


Higher to sharply higher closes Tuesday for Minneapolis. Kansas City and Chicago wheat along with corn, rough rice, oats, soybeans, soymeal and soyoil again aided by a freeze scare. Like I said before freezes rarely come to fruition and when they do the affect is generally minimal. All of the wheat continue to look bearish overall and were pulled up by the rest of the grains although setting 11 cents off their highs like the corn and beans. However, technically today’s action could be signaling the beginning of a turnaround and one should never ignore the technicals. Corn took off actually rallying to 361 1/4 basis the December contract before also closing 11 cents from its highs giving me a BUY SIGNAL that I don’t yet trust. The rest of this week’s action continues to be critical. Oats also had a strong close settled higher still in the middle of a trading range going back to August while also in a good support area. Oats look like they’re forming a massive bottom at this time. Rough rice closed slightly higher but still in a down-trend making lower lows and lower highs overall. The beans closed unchanged to lower while meal settled higher and oil lower but no changes technically. Beans and meal also made new recent lows with the entire complex in a downtrend. Buy Signal for Oats; Sell Signals for Minneapolis Wheat, Rough Rice and the Soybean complex.

Spring Wheat Chart

Corn Chart


Sharply higher closes yesterday for the cash and Dow futures along with the S&P and nasdaq. Look for continued choppy markets especially if my sell signals turn out to be, at least in the near term, tops for the indices. All of the indices still have their KEY REVERSALS in place while in long-term bull trends Go to zaner.com and look under the EDUCATION heading to see the explanation of a key reversal. I expect to see some good rallies whether my sell signals are good or not since the public is itchy to pick the top in the indices. There should be plenty of selling each time the indices start to sell off putting many traders in the hole with any kind of corrections forcing the smaller speculators to buy back when forcing the indices even higher. Today was a perfect example!

Mini Dow Chart

The information in this Report and the opinions expressed are subject to change without notice. Neither the information nor any opinion expressed constitutes a solicitation by Rick Alexander or the Zaner Group of the purchase or sale of any futures or options. Futures and options trading is speculative in nature and involves risks. Spread trading is not necessarily less risky than outright positions. Futures and options trading is not suitable for all investors.

See the balance of my morning comments, including the Metals, Softs, Energies and Grains, at my website. For my complete coverage, visit my commentary page at www.markethead.com.

Rick Alexander has been a broker and analyst in the futures business for over thirty years. He is a Vice-President for Sales and Trading at the Zaner Group (www.zaner.com) a Chicago-based futures brokerage firm. If you would like a free booklet explaining the charts mentioned above, email Rick at ralexander@zaner.com.