Volatility as an indicator | Wheat Futures + WIV(wheat vol index) + SMI
No active signal at the moment, just an idea I'll be tracking.
Enter SHORT on spike DOWN in Wheat Vol Index of at least 7 points (highlighted with red boxes).
Exit on clean crossover of SMI and its red signal line.
Green boxes show upward (losing) extent of move during holding period. Red...
even tough it seems a little bit doubtful, we may be seeing a long move to 590 area in wheat,
the bottom might be in 560 area, so the stops should be placed around 550-555 area.
RSI also shows positive divergence, which may also be an additional positive proof...
1)this is a 1/ZCW
2)COT showing commercials bullish on grains:bullish for grains
3) corn likely to crunch the spread with wheat: bullish for zcw
4)it would be the 6th bullish signal given by 1/zcw on the ES if the correlation (CC) tanks
Wheat often makes seasonal lows in early June. Double bottom posted on 20/05/13 and 17/06/13. A Break of the middle leg of the M confirms the buy with projection to 740.0 level. If 740.0 resistance is penetrated we could see 810.0.
The price of wheat is currently resting on the purple line of the last upward fan with the 1/1 grey line from the last downward fan just ahead and strong volume. I suspect a break is coming soon.
Wheat often makes seasonal lows in early June. It seems is coming out from a tight consolidation around the 700.0 level (20EMA). Target would be 739.0 at the median line, also late march high - possible resistance.
After 28Mar USDA crop report the price has retraced to the 20EMA and 0.618Fib level. If 20EMA resistance holds the price is poised to move back to the 1/1 Gann line. Wheat is a sell if it trades below 6930 with target 6350, approx end of the month.
