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I went to visit a friend at our 20th class
reunion. He used to be a big farmer. 1000 head of
cattle and 300 hog fairowing (sp) operation. He is
small now. He said that Cargill and IBP pretty
much control the futures market. They control by
controlling supply of the commodity and by taking
positions in the market. He gave me several
examples. Here is one of them.
Soybeans were around $9 and were about to breakout
to the upside. The farmers were holding back
taking their grain to the elevators. The farmers
where waiting for the breakout. After the breakout
the plan was to lock in their prices with a hedge
in the market and then take the grain to the
elevators. Well Cargill floated a rumor that they
bought 300 million bushels of soybeans from
Brazil. The soybean market collapsed and the
farmers had to take their soybeans to the
elevators taking a lower price.
He is pretty frustrated over the whole situation.
The way he explained it to me. It is about the
same way that the share croppers were treated
years ago.
A bit off topic but wanted to point out that the
futures has some bias when you think of a zero sum
game.
Harley
Steve Karnish wrote:
>
> John,
>
> Good systems that track commodities should be able to cross over
> and do well in equities. The futures game is "zero sum" (if
> John Manasco "wins" a dollar...Steve Karnish "loses" a dollar).
> Most folks believe that this makes it a tougher game. I thought
> just for fun I'd post the exact same linear regression
> oscillator systematic approach that I posted for lumber, but
> this time for a stock (DELL, one of Jim's current favorites).
> The approach is the same for lumber or DELL...but, the variables
> change to adapt to the rhythm. The chart represents the first
> six months of the year.
>
> Steve Karnish
> CCT
> ----------
> > From: John Manasco <manasco@xxxxxxxxxxxx>
> > To: metastock@xxxxxxxxxxxxx
> > Subject: Re:System development
> > Date: Saturday, August 22, 1998 11:56 AM
> >
> > Steve Karnish
> >
> > Thanks for the reply. You're right about my exit strategy.
> This is
> > something I'm working on to improve. I'd like to come up with
> something
> > that takes the decision out of my greedy little hands. I'm at
> my worst
> > when I try to outguess myself.
> >
> > I've never traded commodities, never even new what they were
> until about
> > five years ago. Someday I'll venture into that arena but for
> now I'll
> > stick to equities and options.
> >
> > Your forcast oscillator system is concise and to the point. I
> like
> > systems that have a minimum of indicators much more than
> systems that
> > use a myriad of indicators overlapping each other. Do you also
> use other
> > money management rules in case your system fails?
> >
> > Do you find some systems work better on futures that equities?
> I'm
> > comming to believe that there is no one system that will work
> on
> > everything but I need to tailor my systems for different
> industry
> > groups and different individual equities. This is hard to
> accomplish
> > without curve fitting but I'm finding that stocks do have
> their
> > individual personalities and respond better to some indicators
> than
> > others.
> >
> > Do you use candlesticks exclusively? Could you say something
> about why
> > you like them?
> >
> > Anyone else want to jump in please do so. I'd like to hear
> from new
> > investors and users of Metastock. How are you going about
> deciding which
> > indicators to study? Are there any trends developing which may
> be
> > helpful to more seasoned investors who also need help? When I
> first
> > started using Metastock I looked at the usual RSI, MACD,
> Stochastics
> > etc. Then everyone started exploring statistical based system.
> What's
> > new now? Any using fibonacci studies? How about cycle analysis
> and fast
> > fourier transforms? A Gann discussion group just started. I
> hope they
> > report back to the list on regular occasions on their
> progress.
> >
> > Anyway it's a nice afternoon and I'm going outdoors to enjoy
> it.
> >
> > Good trading
> >
> > John Manasco
>
> --------------------------------------------------
>
> Name: DELL.gif
> DELL.gif Type: GIF Image (image/gif)
> Encoding: base64
> Description: Dell (GIF Image)
>
> Name: DELL98.gif
> DELL98.gif Type: GIF Image (image/gif)
> Encoding: base64
> Description: Dell98 (GIF Image)
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