Chapter 9 Fundamental Analysis
Chapter 9 Fundamental Analysis
Do you know why traders carry a fundamental analysis? The common element in all approaches to fundamental analysis is the study of the purported causes of price increases and price decreases in the hope of ascertaining changes prior to their occurrence
The common element in all approaches to fundamental analysis is the study of the purported causes of price increases and price decreases in the hope of ascertaining changes prior to their occurrence. Do you know why traders carry a fundamental analysis?
SUPPLY AND DEMAND Anything that decreases supply will tend to raise prices,and anything that increases supply will tend to lower prices
SUPPLY AND DEMAND ◼ Anything that decreases supply will tend to raise prices, and anything that increases supply will tend to lower prices
Price and Supply Price Q
Price 0 Price and Supply s’ s E E’ Q D
Price and Demand Price Q As price goes up,consumption drops,and vice versa
Price 0 Price and Demand D D’ S E E’ Q As price goes up, consumption drops, and vice versa
MARKET REPORTS The U.S.Department of Agriculture (USDA)provides a number of very thorough and generally accurate reports on daily,weekly,and monthly price movements
MARKET REPORTS The U.S. Department of Agriculture (USDA) provides a number of very thorough and generally accurate reports on daily, weekly, and monthly price movements
SEASONALITY If we study cash commodity prices over an extended period of time on a month-to- month basis,we find that during certain months of the year price tends to top, whereas during other months price tends to bottom
SEASONALITY If we study cash commodity prices over an extended period of time on a month-tomonth basis, we find that during certain months of the year price tends to top, whereas during other months price tends to bottom
Monthly seasonal price tendency for corn CZ04 [10]-Corn (Day) LAST:1994 CHANGE:2'0 HIGH:200'6 L0m:1972 11/12004 MA(CZ4.4=2112MA(CZ4.9)=2522MACZ4.18)=2522 340'0 3300 320'0 310'0 300'0 2900 280'0 2700 260'0 2522 240'0 230'0 220'0 2112 futuresource.com 1994 909192939495969798990001020304 Monthly
Monthly seasonal price tendency for corn
Weekly Corn Prices %C1-[10]-Corn (Day) 892002 LAST:2502 CHANGE:40 HIGH:250'4 L0r:2450 250'0 240'0 2300 200 2100 200'0 190'0 RS1(%C1,14=69.46 60.00 40.00 Jun Aug Sep Nov 02 Mar May Jun Aug Weekl
Weekly Corn Prices
Seasonal Tendencies in Futures Prices charting seasonal tendencies of futures prices on a week-to-week or day-to-day basis is more suited to the needs of the short-term trader than is the monthly cash seasonal
charting seasonal tendencies of futures prices on a week-to-week or day-to-day basis is more suited to the needs of the short-term trader than is the monthly cash seasonal. Seasonal Tendencies in Futures Prices