Yesterday saw strong rally led by a drop in the dollar on a correction, a strong rally in the crude, fueled by a surprising drop in gasoline supply on hand, which fueled a rally in the grains led by soy oil. We also saw a nice short covering rally in the wheat at the end of the day as longer term shorts covered losing positions and forced Dec wheat above the key 450 level on the charts.
We had a nice intra day rally in stocks, and even though the indexes settled lower we recovered most of the earlier day’s losses.
As we speak, the indexes are down, which is surprising given seasonal tendency for markets to rise with fresh money coming in at the beginning of the new quarter.. At some point today, we may see a nice rally reflecting that fact.
As for the grains, we are still being swayed by rumors of frost, but the fundamentals are that we are looking at huge crops in both corn and the beans. Yields are higher than expected, and as I said before, sooner or later this fact will lead to lower prices, unless we see a spike in demand.
As I write this the markets have opened.. Corn is slightly higher as are beans.. Nov beans are flirting with breaking through the 930 barrier.. Resistance above 930 is at 937 and then 946. The key 950 strike in Nov beans could force a rally to that point. Round numbers attract market activity..
Interesting to be flirting with making new highs in the face of yesterday’s bearish stock report for the beans. Just goes to show that price action is always more significant than fundamental news.
Fundamentals can turn into funny-mentals because the fundamentals say one thing but the market discounts it or often times fades it almost in an effort to punish as many ‘smart’ traders who have done their homework, and used common sense with the fundamentals… Very often fundamentals win out at the end of the day, but it can be a long day, and during that day.. the market will dish out emotional pain by rallying against the ‘correct’ fundamental position.
Stock indexes are currently lower, with the S&p down over 11 handles at 1036 and the Dow over a hundred points at 9550. Perhaps we will get an early start this month as it is now OCTOBER, the month where seemingly nothing good happens to stocks historically…
I myself thought we would see a bounce higher on new money coming into market… The day is young, but it would seem like that old adage is not bearing fruit today..
One thing you have to know is if your plan isn’t working, take your loss, re-evaluate and live to fight another day.
C