| This week’s homework
question has to do with the last on-line class regarding transferring
numbers from the long term charts to the short term. See if you can
correctly transfer these two retracement lines and resistance levels
from the Monthly Wheat chart to the December Daily.
Click below to see the charts - they
will open in a new window. Just close the window to return to this
page.
Click here to see the Dec 03 Wheat day Session Chart
Click here to see the Dec 03 Wheat day Session, Monthly Chart
Answer
Last week I asked you to transfer the
resistance lines I had outlined from the monthly Wheat chart to the
December daily Wheat chart.
The figures in question are:
- 50% retracement level: 486 ¼
- 62% retracement level: 423 (422.95)
- resistance at 379 ½
- and 364 ½.
I also told you that the weekly chart
closed at 351, while the closing price on the daily was 351. Did this
throw you? Did it confuse you why I was taking resistance from the
monthly chart, yet quoting you closing prices from the weekly?
It shouldn’t have. Remember that the
weekly and monthly charts are both comprised of front month data;
therefore they will have the same closing price at the end of each
session.
Okay, the way you should have adjusted
the values to reflect correctly on the daily chart is as follows:
363 (daily) – 351 (weekly/monthly) =
12 cents. This means that the daily chart is trading 12 cents higher
than the long term chart; therefore any figures you transfer from the
long term chart, either weekly or monthly, to the daily chart have to
be adjusted up by 12 cents to reflect correctly on the daily chart.
Therefore the adjusted figures would
be:
- 50% retracement level: 486 ¼ + 12 = 498 ½
- 62% retracement level: 423 (422.95) + 12
= 435
- resistance at 379 ½ + 12 = 391 ½
- and 364 ½ + 12 = 376 ½
So your daily wheat chart should look
like the following (498 ½ not shown):
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