Matt Badiali has more than twenty years’ experience in the Natural Resource Industry. Matt Badiali is also an editor of the Real Wealth Strategist. In an article titled ‘Corn Just Hit Bottom. Get Set to Profit’ he mentions that all prices are influenced by the feelings of investors. However, regardless of what drives an investor to buy or sell a share, it is a bet on the future. For the same reason, it is important to have sentiment indicators in the extremes. If the sentiments are too high, then this is an interpretation that it is not a good time to purchase shares and if they get too low then it is a good time to purchase the shares.
Currently, the market hates corn. From the report on the website, sentimentTrader.com, Corn has been at its lowest price since 2013 November. With the low sentiments, the price of corn soured 22% in a time frame of six months. When the corn price is not low, it is the sentiment extreme which can be used whether or not it is a good time to buy. The problem however is the record harvest which surprised the farmers in United States as the harvest seems like it will come in a record of 175.4 bushels for each acre. This is way higher than what was estimated for the October 2017 harvest.
It means the exports will also rise to an estimate of 150 million more bushels. The heavy crop took the market by surprise and pushed down the price at a time when many farmers were hopeful that the price would rise. The news forced them to sell their crops at a lower price than what they expected just to make as little as possible. This is why the sentiment indicator hit an extreme. This is known as capitulation whereby the people who are sitting on the side lines quit out of disgust. It usually marks the market’s low point which is also a good place for speculation.
Matt Badiali is an editor of the S&A Resource Report which is a monthly investment advisory on mining and oil energy investment sectors. Matt Badiali has studied Masters in Geology at Florida Atlantic University and is now pursuing his P.H.D studies in the same field. The S&A Resource Report covers various factors from the small exploration outfits to the equipment companies and some of the largest resource companies of the world.
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— Matt Badiali (@Matt_B_Guru) December 1, 2017