Wednesday, October 8, 2014

Buy some... Soybeans?!

Back at the start of August, I wrote a post regarding trading Soybeans. Since then, Soybeans have actually dropped by more than 10%. Even though I only played the long side of this trade, I still managed to make some money from this trade. It's not easy trading though, I must admit. I don't really have the best emotional and mental fortitude for it. But, I am determined to get better at it. With all things in life, you only get better if you keep trying.

Anyway, I have once again decided to turn and look at Soybeans. Why? Mostly because of seasonal reasons. Dmitri Speck and Signal Financial Group both have really good seasonal charts I feel.



So based on seasonality factors, wow Soybeans look pretty good.

But hey, why stop there? Based on a host of other technical factors, on multiple times frames such as the daily, weekly and monthly, Soybeans can be said to be oversold.

Just because something is cheap isn't any reason to buy it, of course. However, combining both a seasonal upside along with oversold conditions, I think it is quite possible that there can be a strong upside in Soybeans, along with many of the other agricultural goods.

The USD has been so so strong over the past few weeks and months and I really don't believe in the rally that is taking place in it. A weaker dollar, if it does happen, would also be a nice tailwind to push Soybeans higher as well.

Anyway, I'm just calling out what I see as what looks like an interesting scenario playing out in front of us. This is my personal trading and investing blog after all.

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