This will be another quick post ahead of a busy day at the annual DTN/The Progressive Farmer Ag Summit. Monday's market action in January soybeans left the contract in position to establish an island-top reversal pattern. Let's quickly review what happened:
Sunday night's open saw the contract leave a price gap between Friday's high of $9.95 3/4 and Sunday's open of $9.98 1/4. Over the course of overnight and Monday trade, Jan beans posted a low of $9.96 3/4. This left a 1 cent price gap, and with the market finishing near its Sunday night open and 10 cents off Monday's high, vulnerable to possible sharp selling Monday night into Tuesday morning. This didn't happen. In fact, as I was writing this piece Jan soybeans were building bullish momentum, stretching a fractional gain to a rally of 3 cents.
Still, based on the contracts daily candlestick chart, Monday's action formed a doji. This type of pattern tends to signal trader indecision, and coming at the end of an uptrend could indicate a change in momentum from bullish to bearish. Keep an eye on Jan soybeans Tuesday to see if it doesn't post a second doji, or in other words, close near the overnight open of $9.98 1/2. If so the contract will once again be in position for a possible island-top Tuesday night into Wednesday morning.
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