Today's soybean rout may have pushed the oilseed into a downtrend today. Two consecutive days of substantially lower prices seem to have pushed this commodity into a bearish bias also.
Many Commodities Now In A Downtrend
I have begun to wonder if the emergence of large funds that actively short the commodity markets over the past three months has begun to play an important role in counter-balancing the funds that had previously existed only to buy them. Many of these "short commodity" ETNs are discussed on my other blog (see the link at the right side of this page). These shorting ETFs and ETNs have grown very rapidly to monstrous size and volume, a testament to the demand for such alternatives. This will benefit the markets, if the U.S. Congress doesn't interfere, because while it will simultaneously add tremendous liquidity to the markets, it will also provide a needed counterweight to the long-only ETFs that we had before. This is proof that the market takes care of itself by correcting for overbought conditions, if permitted to do so unimpeded by overzealous politicians with overinflated egos.
I have begun to wonder if the emergence of large funds that actively short the commodity markets over the past three months has begun to play an important role in counter-balancing the funds that had previously existed only to buy them. Many of these "short commodity" ETNs are discussed on my other blog (see the link at the right side of this page). These shorting ETFs and ETNs have grown very rapidly to monstrous size and volume, a testament to the demand for such alternatives. This will benefit the markets, if the U.S. Congress doesn't interfere, because while it will simultaneously add tremendous liquidity to the markets, it will also provide a needed counterweight to the long-only ETFs that we had before. This is proof that the market takes care of itself by correcting for overbought conditions, if permitted to do so unimpeded by overzealous politicians with overinflated egos.
Soybean Intra-day charts
Soybean Daily chart
