Initial Soybean Upleg Now Complete

The Commodity Trader’s view The sharp retracement in 2008 eventually found support from a long term 76.4% level, in Dec. Following an initial recovery phase there are now clear technical reasons why a s/term pullback has commenced.

• WEEKLY CHART – CONTINUATION: The 76.4% retracement of the 2006-2008 upmove, in the 790s, and the Jun-05 757.50 high have provided a very effective zone of support.
• DAILY CHART – MAR-09: When the bounce off that long term 76.4% support exceeded the top of the s/term bear channel top projection, the loss of bear momentum was confirmed. The break of 985.55-993.50 area (23.6%/04-Nov high) was also bullish - however, we had been expecting resistance from the 1072.00-1113.25 area (Apr-08 low/38.2%), and it came from the base of this area. Looking closer…
• DAILY CHART – MAR-09: The shorter term candlestick chart highlights the Key Reversal Day from Monday, with probability the market will retrace greater than the 38.2% area seen so far. We currently assume the pullback to be corrective within a recovery phase, anticipating another upleg in due course. Ultimately the 850 area, which comprises the 76.4% retracement and prior lows from last year, needs to hold. Buyers on dips will ideally favour stops below here.

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