- New Science in old markets -

Wheat compression and stock update

We reported that a number of commodity markets have been compressed, alongside similar compressions in stocks. Wheat is one of those commodities and the group of 4 compressions is breaking down as I write:

 

Wheat compression

This comes on the day when the USDA publishes its latest wheat outlook report, due out in an hour and a half from now. It is extremely dangerous to sell (or buy) a compression break in the face of an impending announcement that may have a serious price impact but that still leaves plenty of room for trading opportunity once the report has been digested in a few hours time. Whichever way this market breaks today is likely to mark the start of a trend that should last at least a few weeks, so wait and watch. Early false breaks are common in such circumstances, so don't assume that this market will stay down below the level of these compressions all session - wait until some more time has passed.

Friday did not produce a conclusive upward break of weekly compressions in US stocks. We remain anxiously on hold.