To the left is a soybeans futures chart. Notice how well the combination of seasonal highs and lows, and commercial positions at those points in time, signal price moves.
Most recently, the seasonal low in the first quarter of this year, has not produced a rally. This seasonal low, also occured at a time when the commercials were heavily long the market. "Well, see what I mean, this stuff doesn't work." That could very likely be a quote from any detractor of this approach.
As I stress repeatedly, these fundamental things are tools as a staring point for a trade, not absolute trigger mechanisms. Clearly, at this point we are in a downtrend in price, and there has been no rally attempt at all yet.
If you notice the last time times these 2 tools were lined up Feb of 04 and June of 05, something else accompanied them, that is not present yet in our current setup. This was a trend change. What this would translate to in today's setup is that we need an upside breakout of the downtrend before looking at the long side. Now, since we are close to the normal seasonal high, the oddss of a big long side upmove are diminished. Yes, it could happen.
This is where timing comes in. There are a number of ways of timing an entry once the fundamentals are setup. These are beyond the scope of this blog. For those who like to study things, this is a good starting point for you. Remember, my basic premise in trading is to line up as many things in one direction as I can. If I cannot do that in one market, I find another place where I can. Soybeans at this point do not have all cyclinders go, so onward.