| BlackCattle - 5/20/2015 07:22
So in the first chart you are showing a range between 310 and 760 respectively, how does that pertain to making a trade? The higher end has been breached once very successfully in 2012. I am just trying to learn how this works..
So would I be right to expect 310 area will be hard to breach without a fundamental change to supply/demand?? Which in this case could turn into the market being comfortable with our current supply, carry over, and prospect of next year's acres..
Thoughts...
Hi Blackcattle,
Difficult yes....invincible? No. In the last months I illustrated this same idea in charts when prices forms the reaction to a set of swings, it usually trades above/below the last pivot that got price to the level that it did. In this case, that level is the lows at 2.90/2.80 (depending on your data provider). In the corn market for instance, since the report, there have been three of these exact same sequences happen. Sellers step down, sellers step down, price folds back in to the next bigger reaction bagging the "minor" sellers, where sellers pounced on it again, and we are off to new lows. They maybe only visible on a daily chart as a poke because they are intraday. But they are NO different than what will take place on the dailies at some point. If you want to see this same "bagging" as price forms a larger reaction, load either the HRW or SRW charts and look at this winter rally...they stalled after somebody got hurt. Even corn did, but its formation is a bit more vague.
IMHO, fundamentals are reactions to price. If you must use fundamentals think of them as the effect, not the cause. $8 dollar corn caused $3.00 corn...$3 corn will cause $8 corn. Thinking back as long as I have been here,(2012), I cannot think of one thing that was telegraphed by fundamentals. In 2013, corn was going to run out,.the midwest was drownding ( i know we were). Fundamentally, the bull strapped to the rocket should have had price in tow....didnt happen. Precious metals, the dollar, crude..equities....nothing did what fundamentally it should have, but the fundamentals were assigned new values and became relevant...
Take Care |
Lines are cool, but market structure rules
