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Jack And The SoyBean Stalk: Fe Fi Fo Fundamentals

By Nico Isaac
Wed, 01 Sep 2010 15:15:00 ET
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This is a lesser-known fairytale called Jack and the SoyBean Stalk.
Jack, a simple commodity investor, ventures out one morning to the information marketplace. There, he will exchange his hard-earned money for valuable insight into the next big move in soybean prices.
YET -- along the way, Jack is swindled by a man who offers him "magic" NEWS seeds that supposedly reveal the near-term trend underway in the soybean market. Jack goes home, buries the seeds, and awakens the next morning to find a huge beanstalk in their place. Excitedly, he climbs the stalk only to arrive in a dark castle ruled by an angry giant who spews inconsistent facts that make Jack so dizzy he tumbles down the beanstalk in a painful cloud of confusion.

When he comes to, Jack remembers these mixed Fe Fi Fo Fundamentals:

  • "Soybeans Rally As Demand Grows For US Crops."

-- VERSUS --

  • "Soybeans Fall On Signs Of Slowing Demand."
  • AND: "World inventories will rise 44% to a record according to US Department of Agriculture estimates. Soybeans are going to be plentiful and potentially burdensome."

--VERSUS --

  • "Soybean yields are going to be below the USDA forecasts. The market is looking ahead to a tightening supply-and-demand situation."
The lesson here is: While the lure of fundamental analysis is sometimes hard to resist, the outcome is often one of dazed confusion.
There is nothing "magical" about the alternative -- technical market analysis methods like the Elliott Wave Principle. It does not promise some quick-and-easy news-driven strategy. It does, however, offer objective analysis of a market based on its Elliott wave price structure, sentiment, Fibonacci time and price relationships, and the like.
And, in the August 31 Daily Futures Junctures, EWI's chief commodity analyst Jeffrey Kennedy presents just such analysis of the soybean market via labeled price charts, in-depth commentary, and live video narrative. You also get a look at Corn and Wheat, for a complete view of where the Big Three Grains could be in the days and weeks ahead.

Tags: soybean futures, grain futures, soybean futures
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