(March 25, 2002) SOYBEANS: The trend is bullish in Soybeans and I recommended a long position at daily confluence support levels. When taking a minute to look at the trading for the past 9-months we see that Soybeans are retracing last summers bear trend, already breaking the 38.2% retracement level and on course to test the 61.8% retracement level at $4.90. Fibonacci expansion analysis (derived off of the A-B-C bottom formation) also points to the $4.88 area as a price level that this move will eventually meet.
SOYBEAN OIL--Soybean oil has had a different experience the past few weeks. Following our exit of our long position as prices approached six-month highs, Bean Oil has retraced significantly lower. If you are curious how I selected our price target (which had us out of our long within a few ticks of the ultimate high of the move) it was expansion analysis that pointed towards a level of just above 1700 for a logical profit target. Prices have now retraced and are resting at a 61.8% retracement of the last rally. If the daily trend can revert to bullish I will again look to enter this market long. However, this time I would anticipate Bean Oil prices breaking above six-month highs upon the second test of those levels.
Kevin Riordan and Danielle Bourbeau www.riordanfutures.com