Wednesday, January 16, 2008

Conflicting signals in soybeans


Look at the two blue boxes in these two charts. The one in the left panel shows heavy buying activity in the soybean complex. The one in the right panel indicates stagnant market conditions in which neither the bulls nor the bears are able to establish dominance. Note that prices and the Bollinger Bands remain flat. The red dots along the zero line indicate poor volatility, and thus, bad trading conditions. Conflict in signals usually means consolidation.