Grain prices overnight were modestly higher, and soybean prices in particular appear to have reached a bottom, as indicated by the Klinger Volume indicator, which turned up late last week. Soybean prices were a solid 20 cents higher during overnight trading. I will be looking to liquidate my short position today if buyers come back into the market. I am always more quick to exit on a counter-trend movement, because they are higher risk on an elemental level. I am eager for the bull trend to continue, and today may be the day for that to happen.
Soybeans have traditionally been the favorite grain of speculative interests, and commercial funds, which are typically long-term traders, have added to their positions over the past few weeks while the hedge funds were liquidating, according to my sources and COT reports. This should soon provide price support, perhaps as early as today. Chinese buyers have defaulted on their contracts again, as they did last year, in anticipation of lower prices. They may be disappointed this time, as prices are moving higher once again.
My favorite trading style appears to be reemerging as the dominant form of profitable trading. As a swing trader, I feel that I profit more when prices trade between the limits rather than when prices reach the limits.
My favorite trading style appears to be reemerging as the dominant form of profitable trading. As a swing trader, I feel that I profit more when prices trade between the limits rather than when prices reach the limits.
Go Beans!
There was a series of good articles on seekingalpha.com this morning on the subject of commodities, suggesting that the rout of the past few days was minor in comparison to the commodity bull market over the past several months. Gold is still at $920/oz. and crude oil is still over $100/barrel. Both are still substantially higher than they were just a few months ago (unlike real estate and stocks). They pointed out that that's not much of a rout!
But if stock traders and the Fed are satisfied that the commodity bubble has burst, then commodity prices will likely consolidate from here for a period of time (days, weeks) and begin moving higher again, albeit at a more sustainable and gradual pace. And that spells higher inflation!
Perhaps this time, however, it will stay below the Fed's radar. Parabolic rises in any financial instrument tend to burn out quickly, as has the short-term commodity bull since the first of the year. The more gradual longer-term bull, however, is still not only intact, but will once again begin to edge higher once the Fed's gaze is turned away, just like Frodo's posse moved quietly onward while the gaze of the Lord of the Rings was distracted away to other things. Here is a link to the commodity page on seekingalpha.com:
Commodities - Seeking Alpha
But if stock traders and the Fed are satisfied that the commodity bubble has burst, then commodity prices will likely consolidate from here for a period of time (days, weeks) and begin moving higher again, albeit at a more sustainable and gradual pace. And that spells higher inflation!
Perhaps this time, however, it will stay below the Fed's radar. Parabolic rises in any financial instrument tend to burn out quickly, as has the short-term commodity bull since the first of the year. The more gradual longer-term bull, however, is still not only intact, but will once again begin to edge higher once the Fed's gaze is turned away, just like Frodo's posse moved quietly onward while the gaze of the Lord of the Rings was distracted away to other things. Here is a link to the commodity page on seekingalpha.com:
Commodities - Seeking Alpha
