Several brokers and buyers expressed their surprise at the lack of demand for most special crops this past week.
Comments like, "There is no demand.” and “I have never seen this little demand before.” were common.
There are many reasons given for this lack of demand that make for good conversation.
However, it boils down to supply and demand economics.
Recently, there have been more sellers than buyers.
Plain and simple.
That is all we need to know.
As market technicians, we will continue to focus on the price and do our best to ignore the noise of the marketplace.
The news of the marketplace, opinions of the price, or who is manipulating what does not generate profits.
Price generates profits.
Not opinions.
Not emotions.
Not hope.
Price.
Only Price Pays.
Our readers will remember last week’s newsletter, where we used the Wall Street Cheat Sheet to understand the psychology of the market cycle.
When we look at the red lentil chart, we recognize those emotions as the price progresses through the four stages of a market cycle.
Interestingly enough, emotions often accurately gauge where we are in the market cycle.
Following the red lentil price drop, long position holders may be in Anger or perhaps Panic that they need to get out before the price drops more.
Profitable short position holders might be experiencing Thrill or Euphoria, instead.
Consider that the markets tend to reverse once when the long position holders have reached max pain and have exited their positions.
This newsletter will consider levels of interest where the price often reverses.
A little housekeeping before we look at red lentils:
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