Friday, May 9, 2008

Surprise! Prices Fall Instead!

Surprise shocks in the futures market can always catch traders by surprise. Today is an example. Corn has opened sharply lower with prices selling off instead. Wheat is off sharply as well, with soybeans opening sharply higher, but remaining relatively flat from that opening price. Could demand decay be occurring? Wow!

This is one reason why one of my past mentors told me to ignore fundamentals-related news. If I am expecting the market to move higher based upon a news event that creates this predisposition in my mind, it's difficult for me to sell when the market moves in the other direction. There is always more news that I don't have, and in cases like today, that other news may move the markets in a direction that I didn't expect. Thus, it is best for me to react to the charts, and if I maintain an open mind to either direction, I can trade without the biases that lead me to make errors in judgment.