Sugar: Trend?
I wrote this time last year: 'This is the conundrum of the current market - a solid rally ended and good resistance above but the subsequent decline also seemingly ended with good support below. Perhaps a more neutral stance is where we are going with this market?. That's what we've had for about the last seven months though I do confess I was a little surprised by the follow on lower in the first part of the year. Nevertheless, we've had narrow trading ranges with this year's closing price within 30 tics of the close in May. MAs are congested as you can see and I have a decade long Bearish Andrews Pitchfork which on its Upper Tine (currently 19.34) offering significant resistance along with the 2015 - 2016 50% Fib at 17.04 and the key 21s t 50% Century Fib at 18.09 and not overlooking the heavy MA resistance above the market. However, support is also good with the Middle Tine of the same Andrews Pitchfork (currently 10.16) offering support along with the 38.2% Fib of the 21s t Century Fib at 13.83 and also the newly minted 2015-to-date Uptrend (currently 13.33) contributing as well.
So where now? Well, there's no immediate Bow Tie formation on the MAs so that doesn't give a clue. We are underneath all the MAs, a possibly Bearish tinge and the Neutrality of the last seven months has built up a possible Bear Flag Formation. However, that could indicate an ultimate target well below 10.00...somewhere in the 6.00 area with earlier targets possible...which I hesitate to add as we have some superb looking Uptrend support from last century between 7.00 and 8.00 to overcome which I suggest is a big ask. I think it really will come down to which is the stronger, the overhead MA & Fib loaded resistance or the Uptrend based support below. To be honest, at this moment I cannot tell which it would be...much like the market. I would however suggest that we are moving to end Neutrality and approaching a cusp and soon. The MAs will fall and the Uptrend will rise and one or other will win. After pondering what I have written above, I've decided upon reflection to add a 'X' at about 8.35 as the very near term target for a move lower should the Bear Flag scenario play out...as I am concerned the Neutral bullet point above may be turning more towards the mildly Bearish...just in case.
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