April 10, 2023
By Mish Schneider
The chart shows how many days since any significant rain in the major crop growing regions in the U.S.
Initial yield estimates for this year’s US winter wheat crop have been hammered by persistent drought.
12 Southwest Kansas counties dominate the area of drought.
Wheat, corn, and oats are the major crops.
Yet, the futures prices do not reflect these growing (double entendre intended) concerns.
Part of the reason is that Russia, the main exporter of wheat, is selling the grain at a huge discount.
However, a couple of weeks ago on March 28th, we featured the agricultural ETF DBA as a buy opportunity.
And over this past weekend, our Market Outlook mentions that one huge risk off indicator is that the “Soft Commodities (DBA) made a golden cross right as they are running into multi-month technical resistance and are already at potentially overbought levels on both price and momentum according to Real Motion. However, if DBA takes out the $21 level, then it would signal a breakout of a multi-year base.”
So here we are with drought, technical resistance and another very low risk entry for wheat or WEAT the ETF.
Over the weekend we wrote about Regional Banks KRE as a potential double bottom and key to this data heavy week.
As a side note, KRE remained green on Monday. Another push higher and many of the picks from the weekend’s Daily should also work out.
Back to mother nature though-2 charts and 2 distinct perspectives.
The chart on the left is of WEAT the ETF for wheat futures. In a daily timeframe, it is in a bearish phase. Nevertheless, it is holding the March low and through the cyan line, could set up for a long with a very good stop point.
DBA, in a strong bullish phase, has now 2 tops at 20.75. (Today and in February).
Should that clear, 22.00 next target.
Join Mish along with Bob Lang from Explosive Options for a strategy session for 2023!
When: Tuesday, April 11
Time: 4:30 ET
In this presentation you’ll discover Mish and Bob’s outlook on:
Bring your questions because…
These sessions are rare, interactive, and lively!
For more detailed trading information about our blended models, tools, and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.
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"I grew my money tree and so can you!"- Mish Schneider
Mish in the Media - All clips here
Business First AM A Trade 04-06-23
Making Money with Charles Payne 04-06-23
Business First AM 04-05-23
Madam Trader Podcast 03-20-23
CMC Markets 04-04-23
April 11 Webinar with Bob Lang
April 11 Twitter Spaces Mario Nawfal 8 AM ET
April 13 The Final Bar Dave Keller Stockcharts
April 13 Twitter Spaces with Wolf_Financial
April 24-26 Mish at The Money Show in Las Vegas-2 presentations and a book giveaway
May 2-5 StockChartsTV Market Outlook
S&P 500 (SPY) 405 support and 410 pivotal
Russell 2000 (IWM) 170 support- 180 resistance still
Dow (DIA) Through 336.25 could go higher
Nasdaq (QQQ) 325 resistance 314 10-DMA support
Regional banks (KRE) 41.28 March 24 low held and now has to clear 44
Semiconductors (SMH) 247 is the most significant support
Transportation (IYT) Held weekly MA support and now must clear 224
Biotechnology (IBB) Great job changing phases to bullish but must confirm over 130
Retail (XRT) Don’t want to see this break under 59.75-and best if clears 64.50
Every day you'll be prepared to trade with: