Soybean Daytrader, Barbed Wire And Jackson Hole
August 29, 2012 at 7:25 PM (QQQ)(DIA)(SPY)(SLV)(FB)
by DeWayne Reeves
Another quiet day on Wall Street but as Globex gets underway we are breaking to new lows on the S&P 500 Emini Futures and may even trigger a Tweet issued earlier this week.
(ES) S&P 500 Emini Futures
Soybean Daytrader, Barbed Wire And Jackson Hole
So what could these three seemingly unrelated subjects possibly have in common? Absolutely nothing. I just needed a title for tonight's post. Now that I've gone and commited I'll have to figure a way to weave them together at least loosely since this internet stuff has a shelf life longer than Velveeta.
Soybean Daytrader - Yes, it's a real place with real trades. I've just been a little slow getting it integrated into the RSS Feed and email list. As usual Burt's been slowing me down. I suggest everyone mail him a crisp Benjamin with a note that says "Giddy-up". Better yet, send him half a Benjamin with a promise to send the other half once he gets me up and coding...
In its relaxed, non-commital, slacker-hacker, lurching start its done fairly well. We promise to get focused so we can screw it up properly.
Here's the most recent activity -
New short idea for November Soybeans ZSX2 - if flat, consider being short below 17.16 if opportunity presents. #soybeans #futures #trading
— DeWayne Reeves (@CFRN) August 28, 2012
Last night's Soybean Tweet was good for a 12 cent drop. 12 X $50 = $600 possible profit per contract. 2 pennies a day can be a good living.
— DeWayne Reeves (@CFRN) August 28, 2012
November Soybeans ZSX2 Consider selling 17.13 Stop. #soybeans #grains #trading
— DeWayne Reeves (@CFRN) August 28, 2012
Chart of last Soybean Tweet - bit.ly/OlM1OH #soybeans #ZSX2 #grains #trading
— DeWayne Reeves (@CFRN) August 28, 2012
November Soybeans ZSX2 - Our last Tweet to consider being long above 16.32 rose to a high of 17.59. Watch for possible decline to 16.80.
— DeWayne Reeves (@CFRN) August 28, 2012
Consider being long ZSX2 above 16.32 - 7:27 PDT 06/16/12 #soybeans #zsx2
— DeWayne Reeves (@CFRN) August 16, 2012
November Soybeans dropped to 15.87 for an 18 cent move. Soybeans pay $50 per penny. Some traders may have been stopped breakeven. #soybeans
— DeWayne Reeves (@CFRN) August 15, 2012
to see more including charts visit the Soybean Daytrader
Barbed Wire - Native Americans called barbed wire "the Devil's rope."
Modern day investors and traders often feel the same way. Have a look at yesterday's chart -
S&P 500 Emini Futures - Barbed Wire
See the resemblance? Cattle learn pretty quickly to stay away and as a trader you are well served to do the same whether you're watching a 5 minute chart or a daily chart. The above example happens to be an hourly chart.
Barbed-Wire as it relates to trading is simply a graphical representation of investor sentiment. What you are seeing is very slow market movement. One tick up, two ticks down, three ticks up, one tick down. Get the picture? How long can it last? As far as the eye can see. Honestly, even further as it often stretches well over the horizon and into tomorrow or even next week. You can start to think the market might never move again, which we know is untrue. If you think you've stumbled into barbed wire, check the volume. There may very well be some active trading going on, but what you won't see are large lots on the time and sales. It's either "the machines" playing a game of chicken or just some retail traders tearing themselves to shreds. In most cases, the "smart money" is on the sidelines.
Which reminds me... <note to self>
Go to bank tomorrow and withdraw all funds. When the teller asks "Would you like that in Tens, Fives, Ones or shall I mix it up for you today Mr. Reeves?" Reply "It doesn't matter, just make sure it's SMART money". Move down two tellers and redeposit. Bounce out, head high and strut all the way back to the office.
Because now baby, you ARE the smart money. <note to self> (keep this a secret)
Jackson Hole - At the Economic Symposium scheduled for Friday, the Fed Chairman will give a speech titled “Monetary Policy Since the Crisis” which investors will dissect, searching for clues that a third round of quantitative easing, or QE3, is coming.
According to Augustino Fontevecchia one of the writers at Forbes, the markets may be on the edge of their seats for now but they may well end up on the floor as he firmly believes that Helicopter Ben will not use this opportunity to introduce QE3 or anything concrete for that matter.
Fed Chairman Ben Bernanke has been very careful with his language, telling investors repeatedly “monetary policy is no panacea.” While he has proven that under his tenure there will be an active Fed, he understands there may be unexpected consequences from unorthodox monetary policy. Investors should remain cautious ahead of Jackson Hole.
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