Trying to find the “God” indicator in technical analysis is likely to be as tough as the search for the “God” particle at the Large Hadron Collider.
Is there one to find? That’s what the folks at CERN in Geneva, Switzerland will maybe discover sometime with that big go-cart track of theirs. Is there one to find in the ag markets? I wonder. No one in ag analysis has as much money as the physics boys and girls, so there will probably never be definitive answers to that question. (Except possibly hidden inside the bowels of a hedge fund.)
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Worrisome drop in grain prices
Prices had been softening for most of the previous month, but heading into the Labour Day long weekend, the price drops were startling.
Some people don’t believe that technical indicators have any value whatsoever. They think everything’s a random walk, that new fundamental information comes into the market in an unpredictable way and that’s what moves prices. Some are confident (arrogant?) enough to think they can figure out the future path of prices from their own knowledge of the fundamentals. I guess they figure they are smarter than everyone else in the market.
I like to believe technicals are more valuable than fundamentals in projecting price directions, partly because I think it’s absurd to think anyone without inside knowledge can outguess the market (that’s what fundamental analysts try to do), mostly because I like studying history and chart analysis is really just the history of price patterns, and partly because I like indulging my mostly-latent mystical side and search for hidden patterns and keys to reality.
In fact, I recently discovered a hidden subtext to most of the music I’ve liked over the past 30 years. At Christmas I finally tracked down a downloadable copy of Gavin Bryars’ Jesus Blood Never Failed Me Yet – a minimalist masterpiece that I haven’t been able to find for years – and by researching the piece (skimming a Wikipedia entry) I found references to Brian Eno, with who Bryars played and who produced the album. Hmmmm, I thought. Didn’t I recently download an album by MGMT that has a song named after Brian Eno? And didn’t Brian Eno produce some of David Bowie’s best albums in the 1970s? And didn’t he produce the best of U2’s albums, from The Forgettable Fire to Zooropa?
Golly, the answers were yes, yes and yes. And as I Wikipediaed Eno more, I found – which I should have known decades ago – that he was an early member of Roxy Music (loved those albums), contributed to Genesis’ The Lamb Lies Down on Broadway (which I at one time loved, though I wouldn’t admit it) and helped invent ambient music (which I have loved since the early 1990s). And when I, happily playing Bowie-Eno’s Low, Lodger and Heroes albums on the weekend, got a sudden hankering to play a much later track by Bowie, a spooky song from the soundtrack to David Lynch’s Lost Highway, I discovered it was from a 1995 album Eno also produced. (It also contains that disturbing song from the soundtack to Seven). Holy cripes, methought, half the music I own is by this guy and I didn’t realize it. Wow. I guess I should pay more attention to producers than the named artists. That’s the spirit behind the songs, perhaps. The artists are just window-dressing. Eno is the “God” factor behind the music I like.
Anyhow, I was thinking of all this as Sunday morning I played with charts at Barchart.com and tried to find simple technical measures that would tell me what was going to happen with crop prices in the next few months. Was there an “Eno factor,” some so-far-unrecognized element that would reveal to me where things were going to go? I played with oscillators, moving averages, stochastics, etc. Didn’t find any simple “God” technical to have unquestioning faith in. (I have done this many times. Always the same negative result.)
This afternoon I’m going to be transcribing an interview I did last week with David Drozd, the fearless Winnipeg agricultural technical market analyst, about his take on today’s market, but I don’t recall asking him whether he’s ever found a “God” technical. I know he’s a fan of the slow stochastic, but I don’t know how much faith he puts in it.
I expect the Large Hadron Collider will discover the “God” particle before anyone figures out an ag market “God” technical, and that’s probably a good thing. There’s got to be some mystery left in the universe.
