Agec 420

1
Agec 420

• Markets
• TradeSim
• Technical Analysis

2
Corn Market

• Bot 1 MidAm Dec Corn _at_ 2.29¼, March 6
• Close /-
• Tu., Apr. 9 2.22 ¾ -65.00
• CBOT http//www.cbot.com/

3
Cattle Market

• April 3 buy 1 MidAm April LC _at_ 71.55
• NOT FILLED
• Close Change
• Apr. 3 71.625
• Apr. 4 70.125 -1.50
• Apr. 5 68.675 -1.45
• Apr. 8 67.675 -1.00
• Apr. 9 68.925 1.25
• Apr. 10 (1130am) 67.425 -1.50
• Cattle http//futures.tradingcharts.com/chart/LC/
  42

4
Technical Analysis

• 2 main types
• 1. Charting
• Bar charts are the most common
• Others Japanese candlestick
• Elliot wave theory
• 2. Indices
• Moving averages
• Relative strength index

5
The Bar Chart

• Axes show price and time
• Vertical bars
• price range (day or week)
• top of the bar --gt highest price
• bottom --gt lowest price
• tick on RHS closing price

6
Charts

• Two basic categories of chart patterns
• 1. Trends and trend reversals
• Rationale
• bandwagon effects,
• gradual release of information

7
Charts

• Categories of chart patterns (cont.)
• 2. Resistance and support planes and associated
  topping and bottoming patterns
• Rationale investors memory
• sell when it gets back to the price they bought
  at
• buy when it gets down to where they wish they had
  bought

8
Charts

• Trends and reversals

9
Downtrend and reversal

• Downtrend
• Downward sloping line drawn above prices,
  connecting the highs.
• Close above a downtrend --gt buy signal

10
Close above a downtrend
11
Close above a downtrend
Close above downtrend
12
Close above a downtrend
13
Uptrend and reversal

• Uptrend
• Upward sloping line drawn underneath prices,
  connecting the lows.
• Close below an uptrend --gt sell signal

14
Close below an uptrend
15
Close below an uptrend
16
Close below an uptrend
17
Charts

• Resistance and support planes
• Topping and bottoming patterns

18
Tops and Bottoms

• Double top (bottom)
• Head and Shoulders (top or bottom)
• Illustrate on blackboard