Wheat Continues Short-Term Downward Trend
Wheat continued its slide to the downside today, with the price for the March contract (WH8) resting at 882.5 at of the time of this writing – a 0.73 percent drop on the day. March Wheat had been as low as 878 in early trading before bulls came in and took the price up around 907. But just before the noon hour, the bears reasserted their muscle and slowly brought the price down to its current level as the afternoon progressed.
On the chart, the moving averages crossed yesterday and Wheat remains below both of them today. If the contract reverts back to that mean, the market could be in position for a nice gain as bulls may consider this level a potential double bottom – there is another level of support around this area on 12/31. On the stochastic indicator, Wheat is not near a turnaround level to either side, with bears looking at the highs back in early October. Over the longer-term, the market could be approaching resistance at 962 (October), 986 (December), and 950 (January).
In other news, the U.S. stock market made significant gains today as the March S&P contract (ESH8) ended the day with a 12-point gain. Fed Chairman Ben Bernanke's indications that there may be a rate cut at the end of the month spurred the positive moves in the equities. Later in the day, it was announced that Bank of America is in talks to acquire Countrywide Financial.
Mike Tosaw, Director of Education
