Keeps below 200 day MA after weaker GDT prices
The Global Dairy Trade prices showed a -2.9% decline today and pushed the price below the 100 and 200 day MAs. The price just made new session lows.
Looking at the daily chart, quite frankly the price has been chopping up and down between 0.6550 and 0.6750 (with an extension to about 0.6825) going back to the beginning of February. The low close going back to February 3rd comes in at 0.6577. The low today just reached 0.6586.
Is the breaking of the 100 and 200 day significant today? After all, the price has been moving above and below those MA through all of February and into March too.
Well, it is because it takes a lot to get the 200 and 100 day MA to come together. When the price joins those two moving averages it defines non trending, neutral, and an "I don't know what to do" market. Non trending also leads to trending. So the hope is....move away and trend.
Now since the beginning of March when the two MAs started to converge, there was a break above and a move higher of about 175 pips. The rally stalled and the price corrected back to the 100 and 200 day MAs again. This time the rally was 147 pips. The rally stalled again. UGH.
The price has now broken to the downside. If the buyers could not "break and run" - at least for long - it is the shorts turn to show what they can do. That should include staying below those MAs (that is the risk) and pushing below levels like the low close at 0.6577, the 50% at 0.6551 and head down even to the low for the year at 0.6346.
That is what it should do. Will it do it? We don't know but the push was made today and the risk can be defined too.
