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Bear Trap in Soybeans?

  • Ken Lake
  • Jun 9, 2017
  • 1 min read

Disclaimer: Be very cautious talking in bullish terms to producers.

Be that as it may. We might have just witnessed a classic Bear Trap chart formation in soybeans. Note the two arrows below on the July Soybean chart. Both breaks were the evidence needed to convince the trade that all was lost in the soybean market and spec funds added and added and added to their short. And now this reversal. And now we are right back to the old low, 945. If we take out 945 the trap is confirmed and we will trade higher.

The seasonal timing is right for funds to even their short position and build longs. It is early enough to see one, perhaps two, volatile weather events yet this summer. There is little fundamental support for a rally in soybeans but money flow doesn’t care about fundamentals. In reality, in order to produce the massive soybean crop that we fear, the weather must be ideal from this time on and that, of course, will not happen.


 
 
 

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