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Retreat in Wheat Does Not Look Complete

06 August 2009

The long term Wheat chart has twice tried to overcome its 23.6% recovery level and failed. Notable weakness in June put bulls firmly on the sidelines, and there remains good potential for further shorter term losses.

The long term 76.4% retracement has provided good support, but the market is currently unable to keep away from this.
But it still could provide the platform for a better medium term recovery phase in due course.

Note how the 23.6% recovery level has thwarted two tries to trend higher.
The 455.00 Dec-08 low remains vulnerable at present.

Current action remains capped by resistance from the old rising support/return line, AND the current 23.6% area (eroded intraday but not closed above).
As remarked in the Commodity Trading Guide the risk remains to the downside.
We currently keep in mind two Fibo projections, at 468 and 440 – these straddle the 455 low on the Weekly chart.
At this stage a close above the 557.50 03-Aug high would provide a s/term bull signal and delay a continuation lower.

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