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cropsey, il 61731 | JP's what happens next post is about the best explanation of the overall situation. If we didn't recognize a downtrending market where profitable sales must be made because they will not be offered regularly, a guy could go out of business waiting for better prices (and it does happen). On the other hand an uptrending market gives a guy lots of chances and so the behavior is more 'scale up' selling (or go out of business waiting for and missing the top).
To me the technical side watches trading being performed by humans (or computers programmed by humans) and, based on past behavior, make some attempts to characterize the market and potentially predict a direction or possibly a price. Where it can be challenging is when multiple fundamentals come into play that could change the trend in a heartbeat, making all the previous market structure null and void (at least temporarily). For example this fall yields may come in a little lower than expected (but sort of expected) in the face of adequate supply. The result to me is business as usual since it's not really a surprise to those in the trade and so the trade marches on somewhat predictably (trend is your friend, etc). On the other hand if there is a sudden change in some area unrelated to ag that ends up shovelling a bunch of money into commodities (possibly changing the trend), technical analysis won't predict that and the work starts all over with the new market 'rules'.
So, first you have to be a student of the market - what's happening. Next if want you can start applying technical analysis to see if you can establish some point where things change given "what's happening" doesn't change a whole bunch. No one ever said you could make yourself rich overnight using tech tools. You might have fewer "why did I do that moments" in your marketing though. In the end it's a good attempt to do better than just splitting your sales up into 52 chunks and selling every tuesday throughout the year.
Personally I have lots of hogs to chase these days and if my break even calculations are pretty close I'm going to try to make plenty of sales at that point when it's offered in a downtrending market so I get to keep playing farmer. I'm very grateful to guys doing analysis here and it certainly helps me understand the market I'm selling into. The market has no responsibility to give me a profit or even my COP, but it does at times and the analysis helps me get out of my sheds and make sales when the window may be narrow.
Nothing is full proof and different tools apply at times, but I guessing I'm waiting for the app. :-)
Edited by Pat H 9/14/2015 08:38
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question for jpartner
