Today I played one of my favorite market games, aptly named: “Are We Having FUN-damentals Yet?” Here are the rules:
- Pick a market from the world’s leading commodities.
- Choose a position – long or short – in said market based solely on external news events, as they develop in the mainstream financial media.
- At the end of the day, count up the number of times you changed your position due to the constantly shifting interpretations of the news.
Let’s begin. For step number one, I pick WHEAT.
The first breaking news item to come down the pike is bullish: “Wheat prices buoyed by growing hope that the grip of recession may be easing, in turn aiding commodity sentiment.” (Forbes)
Seconds later, one outspoken Federal Reserve Bank president squashes such optimism with this grim statement: “Given the severity of the global macroeconomic shock, the possibility of a deflationary trap can not be dismissed.”(Reuters)
Next: “Outside markets right now are influencing the grains. There’s nothing in terms of weather and the like that seems to be important at the moment.” (AP)
Versus: “It’s the time of the year where we look at weather pretty closely. We’ve divorced ourselves from outside markets and are trading independently.” (Forex Pros)
And finally: “Wheat declines as rain boosts prospects for US grain crop.” (Bloomberg)
Versus: “Fargo Flood Crest Ahead, May Delay Wheat Planting” in lieu of the worst river deluge in North Dakota in more than a century. (AP)
Six switches to my position later -- and I’m no closer to knowing where Wheat prices may be headed next.
As for clear and consistent insight into the next big move for the grain, the March 26 Daily Futures Junctures is the place to be. In this issue, veteran editor and Elliott Wave International’s chief commodity expert Jeffery Kennedy offers this noteworthy detail:
“Of all the data contained in a single price bar – open, high, low, close, range, etc – the single most important piece of information is the close. Why? Simply put, after all the gyrations a market makes, the close represents the last and final word on the subject.”
Find out “the final word on the subject” of wheat’s near-term trend now. Subscribe absolutely risk-free today for instant access.
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