Volatile weekend ahead highlights benefits of rules based marketing

ABSR Research: Chart of the Day

This weekends G-20 summit and the volatility that it will produce is a good reason to highlight the importance of a “rules based” marketing plan. The entire purpose behind a system based on proven signals is to relieve the stress and forced decision making that events like this create. Professional commodity traders do this mainly because they already know the positive long term odds it will produce and secondly if they didn’t, they would probably have much shorter lives constantly stressing over the 20 to 80 contracts they may have on at any given time. Today’s chart of the day is the Jan 19 soybean since our signal period began on Jan 1, 2018. As you can see, we were already setting shorts well before the trade war began when our model was generating overbought conditions. To date our weighted average sell price (SF19) is $10.11 per bushel. Would we have taken every signal or only used the Jan contract, of course not, but we received the same signals in the Nov 18 future as well contracts after Jan 19. The point here is the system told us we needed to sell something, buy puts, etc…and now the stress of this weekend event is much reduced. Markets are evolving and becoming more difficult to navigate as larger players dominate flows, is your marketing plan keeping up?

Shawn Bingham, CAIA

Source(s): ABSR Research, Commodity Systems Inc.

The ABSR Research: Chart of the Day is a caption from our daily Agriculture Edge Market Monitor newsletter. The full report includes statistical based commentary, graphs and data for the agriculture sector including: Corn, Soybeans, Wheat, Live Cattle, Lean Hogs, and Cotton. To learn more about our agriculture marketing platform click here. To register for a FREE, no obligation 30 day trail click here.

 

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

©2018 ABSR Research LLC. All rights reserved. The risk of loss in trading commodity interests can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The materials and data on this site are provided on an “as is” basis and without warranties of any kind. While every effort has been made to insure the accuracy of the information, no guarantees can be made that the information is full, complete, or accurate. Performance information with regard to the ABSR Indices contain a significant period of Pre-Inception Performance (PIP) history. Users should be aware of the limitations of this type of data.