By Chris Lehner
Sunday morning, Aug. 18, on my Google alerts for "corn prices" there were 29 reports. I decided to see how many were bullish or friendly and how many felt that corn could move lower. The reports were from private analysts, large wire services and website newspapers from around the world. I have to admit, I was pleased when six were good old fashioned reporting with facts on both sides and no opinions. It left twenty-three that were that were slanted bullish or bearish. Thirteen I considered bullish and friendly to corn prices moving higher, and eight were bearish with two so poorly written I couldn't tell.
Naturally, when reports are written by analysts they tend to be opinionated. But when wire services and newspapers report, unless it is an editorial, hopefully the reports are balanced. But in today's world, it isn't always what happens.
But out of the 29 reports, if you are a bear or bull Sunday morning, you could have found more than enough information to support your desired way of thought. However, there is a tendency to pick reports how readers want the market to move disregarding the other side. It's a great way to approach analysis if the market moves in the desired direction but it can be detrimental if markets go the opposite way.
There is a big pitfall trading only from the fundamental point of view especially when the viewpoint is slanted. On most days markets are moved by technical and formula trading systems that have no knowledge of fundamentals. As I have pointed out many times, if flooding rains covered the Midwest followed by freezing temperatures and charts and formulas had sell signals, there is a strong possibility prices could fall.
Think about it. How many times have USDA reports been bullish or bearish and by the end of the day price action was completely opposite to the report. Recent studies are now claiming with USDA reports released during the times markets are trading; price activity was more of a consequence of supersonic trading systems versus information from the report. When prices move within nanoseconds of a report release, there is nobody alive that can take over 30 pages of information, break it down and accurately trade it. Formula traders don't try. Orders are pushed into the system with such speed from around the world, that prices move in the direction of the majority of traders with the fastest computers and with the largest amount of similar tickets.
In other words, don't get caught up using short term fundamental analysis trying to prove a point. Over the long run, the fundamentals will be right but in the short of it, lets face it, money and power move the market.
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