Capricious Moves Market!

Maybe it was my subtle naïve thoughts that if I finally offset my long contracts and moved into the selling game I would start to see some profits.

Wrong!

I moved in with 2 short contacts in both Corn and Wheat.  I figured with all the negative news last week and with no new buying signals triggered by the MACD lines I would be sure to see the market continue in a downward motion.   I am trying to stick to 3 major sources for each commodity. I review the futures.tradingcharts.com Intraday-Daily-Weekly chart terms, I am trying to look at highs and lows, also now I am using some of the technical analysis tools trying to identify trends and buy/selling signals.  Unfortunately I came to the understanding this week that maybe these indicators are not really helping.  2 things could be occurring,

1) There is too much of a lag with the indicators and the actual market is beyond unpredictable

2) These indicators are correct but they are forecasting movements to far in the future.

I put in my bids all below the daily high Corn-576 and Wheat -603.

My Values – what I am trying to trade is overall 1% of the total value; this amount is usually where I start my bidding. I figure that anything under 1% is not significant enough to make a difference on my net position.  Unfortunately we have seen the market rise this week there has been 3 out of the 4 days this week with an overall gain of about 2%. This doesn’t help out my new Short Contract position.

But my strategy is still going to stay the same this week; I am just taking this as a minor rally back from the market after seeing 2 consecutive weeks of significant market decreases.

Soybeans this week moved a day later and in opposite directions from Corn and Wheat, at least I had the right idea with Soybeans, unfortunately my bid were to low at 1155. The markets lowest point this week was 1152 on the 4^th and that’s where I made a small gain.  Wheat moved erratic this week, up-down-up-down anywhere 3 and 4% so I guess my conservative 1% movement is not enough to keep up with the Wheat traders.

The other 2 sources that I am looking at for information are: grainfuturesupdate.com they give a daily technical analysis review of the grain futures.  Today the author identified a sell signal on the daily charts, I am going to follow this a bit further to see if these indicators can really predict some market changes.  Overall my net position was down this week because with the market increasing for Corn and Wheat, and holding pretty steady for soybeans, and myself holding short contracts in all of these I just didn’t make any money. Lastly I have been reviewing the International Grains Council igc.int.  I find this site gives a good Global assessment of our 3 commodities.  I am going to work backwards to see what sort of news was released early in the week for Corn and Wheat to perhaps influence the changes in the market.  There were releases about spring yields being disappointing, economic theories start rolling through my head, decreased supply – increased price.  Also this week talk of increased Demand for Corn in China, again increase in demand results in a higher price… I guess I will just wait and see what the USDA Crop Production and S&D reports disclose.  Soybeans are looking grim for next week as well, Palm Oil is down, and Soybeans finished 8cents off yesterdays close. I will keep with my short position here for sure.  Wheat seemed to be the most erratic this week, overall my position of short was a good strategic move for the week it is just luckless that my price was to low.  Looking today the last dip before the market closed could be due to news that the Ukraine may cancel export duties for wheat and corn, this would increase global competition for exports.

Lastly when I am making decisions for the weeks strategy I look at the trading markets not pertaining to grain commodities. I like to compare how currencies and the Indexes are trading, mostly the UD dollar and the Dow and Nasdaq.  This week I took some interest to the energy and oil futures and see if there was a significant correlation between Corn/Ethanol and in general Oil.  I also am trying to see if there are additional relationships between the grain commodities and the metal futures, (mostly Gold and Copper)

Overall I am going to wait to see if the technical analysis indicators can really make decent predictions with regards to buying and selling signals.

I will continue with my short contacts and re-evaluate by Tuesday is I should re-price my short contacts to a more conservative value.