The wheat price has broken out to the downside, but I am not trading it. Why not?
- There is no news in wheat, but there is macro news. A breakout for no reason might be interesting, but a breakout because of potential weaker demand (based on European news) is pretty limp.
- It’s not very convincing breakout. It first happened on low volume before the main trading session had begun; the price climbed through the session but sold off in the last ten minutes (thrust is therefore inconclusive). Volume is above the 10-day moving average, but only slightly.
- The entire universe is already short — as shown by the bright green line in the COT net position chart.