Several soybean futures contracts made bottom extensions yesterday - here we show November. This makes a 'full house' of bottom signals in the major grains and we expect that the current weakness in wheat and beans will soon end. Corn has already rallied from a recent bottom signals and all can now be bought (carefully - try to buy weakness).
In the case of soya, it may be better to buy soya oil, as it has already apparently stopped dropping after a recent bottom extension, whereas soya meal is still falling away from a compression that occurred in mid-April. Meal is the main driver of demand for the whole soya complex, so there could be a bit more weakness in meal and beans in the next few days:
US stocks have been diverging lately. Not only has there been quite a bit of rotation (as reported in the last edition) but the main speculative vehicle (the S&P futures contract) has made slight new highs for the recent move, whereas the Nasdaq and OEX have not so much. We got signals in these last two but not in the S&P (update below) yet this does not have any particular meaning - we expect that the main indices will broadly move together. These signals are still 'in date' so stay short:
We have just published the May turn calendar, on the front page. It shows more and bigger turns than in recent months, which probably means that the period of quite low equity market volatility that we have been passing through is about to end. Our view remains that US equity values (and by inference, those of many other national equity indices too) are range-bound, even though that range is wide. During ranges, there are often periods of wide, fast price swings and that may be what awaits us in the rest of Spring and early Summer. Please trade accordingly, with appropriate position sizes and good risk discipline. More money can be made (and lost) in ranges than in trends.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com