Soy Meal/Bean Oil Spread: Reversal Signal Triggered

Soy Meal/Bean Oil Spread

On November 12th the IMC blog entered a hypothetical long position in the March soy meal/bean oil spread at +$17,044 (premium meal). This initiated the start of a reversal system where closings above +$17k trigger buy signals and closings below +$15k trigger sell signals.

On November 19th the March soy meal/bean oil spread closed at +$14,354 (premium meal) and triggered a reversal signal. Therefore, the long position at +$17,044 would have been liquidated for a loss of approximately -$2,690 and a hypothetical short position would have been entered at +$14,354. A close back above +$17k will trigger the exit signal for the short position and a buy signal for a new long position.

March Soy Meal Bean Oil spread (with 20-day MA) daily

March Soy Meal Bean Oil spread (with 20-day MA) daily

Currently, the mid-November breakout above the May 30th peak and the break back below it appears to be a failed breakout attempt. If so, the spread could be at the beginning stages of a multi-month decline. We shall see…

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s