One thing about fundamental analysis I never understood was -- if financial markets are moved by outside events, how do they know which events to respond to?
Most days, the mainstream media feels like a three-ring circus of dancing "bears" in one circle and charging bulls in another, all the while prices in the related market struggle to walk a tightrope between.
Take, for example, the Soybean Complex. In the last 24 hours, the "fundamental" news clips regarding the soybean market have been all over the map. To wit:
- "Dwindling stockpile boosts US Soybean futures." (Forbes) -- Versus -- "Tight old-crop stocks remain a bullish factor for soybeans; however, gains may be limited by strength in the U.S. dollar." (AP)
- "Grain futures close mostly lower in spite of a rebound in US stock markets" (FXstreet.com)
- "Soybean futures ease on expectations advancing monsoon may support sowing and boost supply." -- Versus -- "Soybeans extend gains on monsoon forecast." (Reuters)
Any questions?
As for a clear and consistent take on the near-term trend changes in store for soybeans, Elliott Wave International's chief commodity expert and
Futures Junctures Service Editor Jeffrey Kennedy is circus-free. In the March 2009
Monthly Futures Junctures, Jeffrey foresaw a strong rise in the grain's future before the tide had turned in earnest and wrote:
"Wave patterns in soybeans are shaping up in such a manner that a test of the January high seems imminent. A bit more upside is required to shift the odds of such a move entirely in one direction... and move our [bullish] labeling to the forefront."
From there, soybean prices soared to a nine-month high in early June. Then, from the grain's most recent peak, Jeffrey set the stage for a powerful decline in the June 10 Daily Futures Junctures. There, Jeffrey presented the following price chart of soybeans and wrote: (Some Elliott Wave labels have been removed from chart for this publication)
"As you can see, wave 5 (circled) is within points of achieving an important Fibonacci relationship common to fifth waves... Price action in this market has been and still is exciting."
The sell-off to a five-week low that followed speaks for itself.
Now, Jeffrey revisits the entire Soy complex (and soybeans individually) in the June 24 and June 25 Daily Futures Junctures. See what all the "excitement" is about today, absolutely risk-free.