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You only get one tool to market your grain. Which one would you pick?
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farmer4321
Posted 8/17/2018 07:48 (#6933992 - in reply to #6933269)
Subject: RE: Why would you .....


I fully appreciate the value of technical analysis but ask yourself. On May 24th beans were $10.53, by July 16th it bottomed out @ $8.34. Ask yourself, did any technical analysis anticipate that movement? Even after it started, did technical analysis predict how far it might decline or when the decline would stop? On Aug 9, beans ended at $9.02, by 1 PM on Aug 10 the price was $8.60, and likewise, on Aug 16th the price was $8.60, it ended @$8.95. The last move on 8/16 was based on the flimsiest of rumors that some low level trade negotiators were going to talk about having talks. Talks, I might add, trump has already fully discounted.
Just how would technical analysis predict those significant moves?
So let's try some simple fundamental analysis, we know that on Aug 23rd, trump is scheduled to levy tariffs on another $16 billion in Chinese goods, to be immediately followed by a promised $16 billion in tariffs on US goods. Trump has already said yesterday that unless the Chinese come in with a "very good deal" he'll reject it. What's that tell you, that he wants it all in one go. How likely are the Chinese to totally capitulate by next Thursday?
I can only assume that traders bought beans speculating that the trade will get settled and prices will rise from here. But just how likely is that, given the talk?
Do I know what will happen next week? No, not a clue, but I'll bet traders who bought thinking prices will go up from here will be disappointed absent new news.


Edited by farmer4321 8/17/2018 08:04
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