SEASONALITY

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It's The Most Wonderful Time Of The Year
Beans In The Teens

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by Emil van Essen

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Most years about this time, there's an opportunity in soybeans.

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It's about that time of year again, when soybean traders wake up and wonder whether this will be the spring that brings another wild, stomach-churning, and profitable (for some) bull market. One time-honored system with a great track record is certainly pointing to that possibility (Figure 1). The system shown here only takes long positions, and only in February. The strength of the system is in identifying the characteristics of an impending bull market very early in the season, before most traders have entered the market.

FIGURE 1: SOY BUCKS. Could you stand to net 95% of your gross profits? Check out this outstanding seasonal trade in soybeans.

Here's how the soybean system works, for those not familiar with the tradable. The system buys a 50-day high in February as long as there was not a major high last year. Initially, a stop is placed at the 50-day low but rises to a 10-day low after June 1. I used a continuous contract of soybean prices to test this idea.
  ...Continued in the March 2001 issue of Technical Analysis of STOCKS & COMMODITIES

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Emil van Essen is a Commodity Trading Advisor. He may be reached at 800 823-2617.

Excerpted from an article originally published in the March 2001 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2001, Technical Analysis, Inc.

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