The Sugar Market broke out of its down channel with a vengeance last week. It has run up to meet the BlackLine at 13.68 and a Blue Line at the same level. Today’s action also created an Inside Day at the High of the move. With the March contract Overbought and showing several days of Negative Divergence, a Short Signal will be created, and a position could be initiated if Elected. We have seen several markets reaching BlackLines over the last week, and when this occurs, the market would have a tendency to create BlueLine trades as well. Given the magnitude of the rally, a pull back into support would not be out of the question. Look for the gap from 9/29 (.593 retracement) to 9/30 (.50 retracement) to be a realistic downside target (if short signal is elected).
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