So far, this week has been huge for wheat (WEAT) and sugar (CANE), with both gapping up on Monday and continuing higher. Soft commodities have been on the move, as supply chain issues involving China's COVID cases spiking and Ukraine cutting its wheat output have rapidly increased prices. Many are realizing how delicate the food trade is and how everything looks to be leading back to increasing inflation.

Now countries are beginning to cut exports as they focus on their populations' demands first. As it becomes more important to begin planting for lost supply, fertilizers have become less easy to obtain. With that said, from a trading perspective, not only can we watch for entries into soft commodities, but we should also track fertilizer companies.

Two fertilizer-related companies we're watching are Mosaic Company (MOS), and CF Industries (CF).

At this point, CF will need to break to new highs, while MOS could be watched for a close over the 50-DMA at $65.88. We could also look for a bullish phase confirmation with 2 closes over the 50-DMA in MOS. With that said, when it comes to the overall market, the major indices are heading into resistance and will need to summon more buying to get through overhead sellers.

Specifically watching the S&P 500 (SPY), it will need to clear and hold over $410 next if the rally is to continue. If a hard wall of selling is hit in the SPY, stay cautious as even fertilizer companies will get hurt if the market reverses. However, we should keep these symbols on watch, since inflation and food prices don't look to be settling down anytime soon.

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ETF Summary

• S&P 500 (SPY): 410 resistance.
• Russell 2000 (IWM): Watch to hold over 179.27.
• Dow (DIA): 325.25 the 10-DMA to hold.
• Nasdaq (QQQ): 303.93 the 10-DMA to hold.
• KRE (Regional Banks): support 58.75.
• SMH (Semiconductors): 248.17 next resistance.
• IYT (Transportation): 235-239 resistance.
• IBB (Biotechnology): 115-118 resistance area.
• XRT (Retail): 70 resistance.

Forrest Crist-Ruiz

MarketGauge.com

Assistant Director of Trading Research and Education