Date: October 19, 2024

Introduction: Soybean has experienced a significant decline recently, as demonstrated by the market’s interaction with the GATS 369 Channel and technical indicators like ATR and MACD. In this analysis, we will dive deep into the M60 and M240 charts to assess the current price action and potential trading opportunities.

Key Observations from the M60 Chart:

1. Current Price: 982.60
2. GATS 369 Channel:
   • x3 Upper Band: 1010.25
   • x3 Lower Band: 975.20
   • Mid Band: 992.74
3. ATR-50: 2.0990
4. Monthly Low: 953.77
5. Monthly High: 1010.23
6. ADX: The ADX on the M60 shows a strong downtrend, with readings exceeding 30, confirming the current bearish bias.
7. MACD: The daily MACD remains bearish, reinforcing the prevailing downtrend.

M60 Analysis:

• GATS 369 Channel: Soybean’s price is currently below the mid-band and nearing the lower x3 band, showing strong bearish momentum. The x3 channel serves as crucial support, but if broken, price could extend lower. In a bearish market structure like this, traders should closely monitor how the price interacts with the lower boundary of the channel (975.20). Should the price fall below this level, further downside is likely, with the next target potentially near the x6 channel.
• Volatility and ATR-50: The ATR-50 at 2.0990 indicates moderate volatility. Based on this, a pullback within 6 ATRs would be a normal correction, suggesting that traders should set trailing stops at or above the 12x ATR threshold to allow sufficient breathing room for any price fluctuations within the trend. The choice of ATR-50 is ideal for capturing fair value dynamics, providing a stable measure of volatility without reacting to short-term noise.
• Bearish Momentum: Price is trading well below the value zone and has breached the Momentum Zone, further confirming the downtrend. Given that Soybean has been trading within a bearish structure, selling the rallies near resistance points could provide an advantageous entry strategy.

Key Observations from the M240 Chart:

1. Current Price: 982.60
2. GATS 369 Channel:
   • x3 Upper Band: 1010.25
   • x3 Lower Band: 975.20
   • Mid Band: 992.74
3. ATR-50: 3.0566
4. Monthly Low: 953.77
5. Monthly High: 1010.23
6. ADX: On the M240, the ADX shows a strong downward trend, with values over 30.

M240 Analysis:

• GATS 369 Channel: The M240 chart provides a broader perspective, confirming the bearish market structure seen in the M60 chart. The price remains below the mid-band, and a test of the x3 lower band seems likely. Should the price continue its downward trajectory and break the 975.20 level, the next target would be the x6 channel, which would suggest a continuation of the bearish trend.
• ATR and Volatility: The ATR-50 on the M240 chart is higher than that on the M60, measuring at 3.0566. This increase in ATR reflects higher volatility on the longer timeframe, signaling that any pullback or rally could be stronger. However, even in this case, a 12x ATR trailing stop should offer adequate protection while providing room for price corrections within the broader trend.
• Market Structure: The price is still well below the Momentum and Acceleration Zones, confirming the dominance of sellers in the market. The GATS 369 Channel offers a clear structure for traders to follow—those looking to short the rallies should consider the upper boundary of the x3 channel (1010.25) as a potential resistance zone.

Trading Insights:

1. Short Continuation: Traders could consider selling on a confirmed break below the x3 channel, targeting the lower channels.
   • Stop-Loss: Set at 12x ATR above the entry point for protection (approximately 25 points).
   • Profit Target: Targeting the x6 channel for further downside potential, depending on market conditions.
2. Reversal Opportunity: A reversal could be signaled by a break above the Momentum Zone (above the x3 channel) and the mid-band (992.74). However, the trend remains bearish unless further evidence supports a trend shift.
   • Stop-Loss: Set below the lower boundary of the x3 channel.
   • Profit Target: Initial targets could be 3x ATR, with potential to extend toward the upper channels if momentum shifts.

Expanded Insights on GATS 369 and ATR:

• The 9x Channel: This channel represents long-term boundaries and corresponds to the Correction and Trend Reassessment Zones. If the price were to break through the x6 channel and approach the x9 channel, it could indicate an extreme move, necessitating close attention to any reversals or corrections.
• ATR Expansion and Compression: ATR expansion signals increased volatility, which is typically accompanied by stronger price movements. Conversely, ATR compression suggests consolidation or a pause in the trend, indicating that a significant move may be forthcoming. By monitoring the ATR dynamics, traders can adjust their risk management and trailing stops accordingly.

About the Author:

Dr. Glen Brown stands at the forefront of the financial and accounting sectors, distinguished by a career spanning over a quarter-century marked by visionary leadership and groundbreaking achievements. As the esteemed President & CEO of both Global Accountancy Institute, Inc., and Global Financial Engineering, Inc., Dr. Brown integrates accountancy, finance, investments, and trading with technology. His innovative approach has solidified his companies as pioneering entities in global multi-asset class professional proprietary trading and education.

Holding a Doctor of Philosophy (Ph.D.) in Investments and Finance, Dr. Brown possesses profound expertise in financial accounting, management accounting, strategic management, and risk management. His role as Chief Financial Engineer, Head of Trading & Investments, and Chief Data Scientist underscores his hands-on leadership style and deep commitment to innovation.

Risk Disclaimer:

Trading in financial markets involves substantial risk and may not be suitable for all investors. It is possible to lose more than your initial investment. The high level of leverage in forex and commodities markets can work both for and against you. Before deciding to trade any financial instrument, carefully consider your investment objectives, level of experience, and risk appetite. The insights provided are for educational purposes only and should not be considered as financial advice. All opinions, analyses, prices, and projections mentioned in this article are those of the author and do not constitute a recommendation to buy or sell.