It is important to be aware of potential levels of support when selling in downtrends.
It is easy to succumb to our emotions when the price drops.
Often, our emotions get the best of us leading us to panic sell.
My experience is that this capitulation occurs when we reach our max pain threshold, which often, unfortunately, coincides with a pivot point in the market, creating local bottoms.
I cannot tell you how often this has happened to me when trading or in business.
Have you ever noticed businesses close their doors just as the market reverses?
It is a fascinating phenomenon.
So, it is important to be aware of the technical support levels we attempt to identify in advance, keeping you in the market.
This can be avoided, however, by taking the first loss, which is difficult to do and subject to further discussion.
Last week, on January 8th, we suggested the following:
For these reasons, we feel this downtrend could be ready for a pause or reversal.
At the time, March Canola was trading at 616.40.
This morning, March Canola is trading at 632.
It's not a huge move, but it's a start.
Here’s hoping we get some follow-through to higher prices.
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