Technically Speaking

Focusing on the Forest

Source: DTN ProphetX

I need your help with this one. Decades ago when I was one of many young commodity brokers with a particular company in Wichita, Kansas, the owner would occasionally test us on our ability to read markets. He would hand us printed charts (daily, weekly, or monthly) of a variety of commodities after removing any clue as to what market they were for. That removed any fundamental bias we might have that could cloud our technical reading. From there we were expected to provide a conclusion as to a market's bullishness, bearishness, or neutrality as well as project where it might be headed.

Fun days indeed.

But there was some logic to it as well. Sometimes, particularly when markets see increased volatility due to headlines changing the fundamental perception on a daily basis (e.g. weather markets in grains), it's better to focus on the big picture rather than day-to-day mood swings of traders. To that end I present to you a monthly close only chart of Commodity X, in hopes of providing as clear a view of the forest for you as possible.

Now, what do you see?

First, there are no wrong answers. For everyone who sees a continued downtrend there will likely be someone who sees an uptrend. And for everyone who thinks the market is going back to 40.00, there will be just as many (possibly) thinking it's going back to 140.00.

Feel free to post your analysis/comments in the space on this blog, or tweet them to me on the social media site Twitter. If you are so inclined, feel free to guess at what market is represented by the chart.

I'll post an update on what this chart is telling me either later Monday or early Tuesday, depending on the feedback it generates.

Looking forward to seeing your response.

Stay tuned.

To track my thoughts on the markets throughout the day, follow me on Twitter:\DarinNewsom


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6/21/2016 | 7:29 AM CDT
Good morning Richard. You were on the right track. While not one of the Three Kings, it was one King Corn's close associates, cash soybeans.
6/20/2016 | 3:39 PM CDT
It is always a reasonable guess that it is one of the "We Three Kings." However, since Chinese speculative gamblers have lit up the Dalian commodity futures exchange, I am going to guess it is a weekly chart of the Dalian SBM futures.
6/20/2016 | 12:00 PM CDT
Yes, my analysis agrees with the idea the long-term trend has changed from down to up. And yes, I agree the market is approaching trendline resistance created by connecting the two previous wave peaks (Wave 5 from previous uptrend, Wave B from previous downtrend). But no it's not about politics, though I appreciate your sense of humor.
6/20/2016 | 11:47 AM CDT
Looks like a higher high is in this futures future. Draw a line across the previous highs and that is your line of resistance for the next move higher. This must be a chart measuring the discontent for the current presidential candidates. Therefore the trend must be up.
6/20/2016 | 10:52 AM CDT
Interesting comments Frank. I agree that it looks like a little upside left before finding renewed selling interest.
Frank Durbin
6/20/2016 | 9:48 AM CDT
Just looking at it without too much thought involved. It looks to me as it's topping out soon. May have a little more top side before resuming a downtrend?
6/20/2016 | 9:07 AM CDT
Good morning Kenneth. No, it's not live cattle, but that's an interesting read on the chart. I like that you see it in terms of Elliott Wave.
6/20/2016 | 9:00 AM CDT
Is it a Live Cattle chart?? Elliot wave pattern would suggest that a new low will be posted lower than the most recent one.