One of the things I enjoy about writing this column is the interaction with the readers who write in. We don’t always agree and sometimes we agree somewhat, but I always try to make a fair case for my opinion. Sometimes, I get a follow up comment that expresses this. Today is sometimes, as I received an immediate response to my commentary and answer to the reader who asked how one can trade “truth” in the light of market manipulation and a host of fiscal problems. The tone of his original question/commentary suggested fear …
Thanks for your well thought-out response to my question and yes, you are quite right; however, my experience is that fear is useful and can be trusted and so I will continue to use it to trade successfully. With regard to “selling the fact and buying the rumor,” I will add this little quote by David Hume, a Scottish philosopher and economist, “No testimony is sufficient to establish a miracle, unless the testimony be of such kind that its falsehood would be more miraculous than the fact which it endeavors to establish.”
I believe Hume’s quote above reflects the idea that perception can be more powerful than fact, a market reality I often lament. I thank the reader for taking the time to engage, and I congratulate him on finding a trading strategy that makes him successful …
Corn production in the U.S., the world’s largest grower and exporter, will drop 13 percent to a six-year low after the worst drought in more than 50 years damaged Midwest fields, the government said. Analysts were expecting an even bigger decline.
The corn harvest did not go as badly as expected after enduring the recent drought, but the report is the soy harvest will be worse than expected. Even though the southern hemisphere will be able to fill much of the demand for soy, particularly from Asia, pressure on the price should remain high. This a general answer to the reader’s question below.
How much higher can soya oil can go when the harvesting is just a month away? Another question is how long much longer will the price of palm oil will remain lower when soya oil prices are rising every day?
A more precise answer is found in the technical analysis below.
Technically, soybeans are in an upward range channel. They broke out of a “triangle pattern” in mid-August, and now are holding above the apex of the triangle at 1650. If soybeans can hold above this key pivot area of 1650-1660, we have our upward price target at $18.50. There is a deep fundamental supply and demand issue at play here in the soybeans market, and as the weather gets colder in key growing regions, we could see prices make another strong run up.
Finally, I have one more question from a reader.
Is September a good month to trade Forex?
If you had played and are playing the dollar/euro trade, the answer is yes, at least this September, so far …
Trade in the day; Invest in your life …
