Why Wheat and why now. What about Soybeans and Corn.
Looking across the Ags, it seems that Wheat is enjoying the most upside. Why is this. In keeping with my focus on the DMI and ADX, I think you’d have start by looking at the monthly chart of the 3. One of the key tenants of DMI/ADX is that best trades seem to originate when the ADX is below 20 for an extended period of time. And, for Wheat, that has been since June of 2013. Since then, it has moved between a couple of lines and for the most part, remaining below the 13 period EMA of the high.
As an aside, in my previous articles, I used EMA’s on the close of price but have moved to a 13EMA on high, 26EMA on low and 20EMA on close with the intent to use them as a channel for pullbacks based of ADX action.
June of last year, the downtrend line was sharply broken but before that, the DMI made a significant move when the +/-DI swapped. Although this had happened several time during the past 4 years, what eventually became important is that the low of this candle was never broken while the high was continually tested and broken with the last time starting the recent uptrend. Also, note that during this time that the +DMI continued to make higher highs will not making lower lows. With the ADX moving above 20 in May of this year, a strong signal was given that the market was ready to move up.
Now, consider the same discussion for ]Soybeans:
Notice the size of the candle that caused the last swap. I’ve included a possible consolidation pattern.
And for Corn:
With Corn the interesting thing on recent action is that the DI’s changed dominance but did so where the swap was to -DI but with a green candle. I don’t see this too often but seems to give mixed signals.
Looking across the Ags, it seems that Wheat is enjoying the most upside. Why is this. In keeping with my focus on the DMI and ADX, I think you’d have start by looking at the monthly chart of the 3. One of the key tenants of DMI/ADX is that best trades seem to originate when the ADX is below 20 for an extended period of time. And, for Wheat, that has been since June of 2013. Since then, it has moved between a couple of lines and for the most part, remaining below the 13 period EMA of the high.
As an aside, in my previous articles, I used EMA’s on the close of price but have moved to a 13EMA on high, 26EMA on low and 20EMA on close with the intent to use them as a channel for pullbacks based of ADX action.
June of last year, the downtrend line was sharply broken but before that, the DMI made a significant move when the +/-DI swapped. Although this had happened several time during the past 4 years, what eventually became important is that the low of this candle was never broken while the high was continually tested and broken with the last time starting the recent uptrend. Also, note that during this time that the +DMI continued to make higher highs will not making lower lows. With the ADX moving above 20 in May of this year, a strong signal was given that the market was ready to move up.
Now, consider the same discussion for ]Soybeans:
Notice the size of the candle that caused the last swap. I’ve included a possible consolidation pattern.
And for Corn:
With Corn the interesting thing on recent action is that the DI’s changed dominance but did so where the swap was to -DI but with a green candle. I don’t see this too often but seems to give mixed signals.
Corn: