PALM OIL PRICE FORECAST

 

Monkey

Dear Friend & Associates,

MAKE 2016 YOUR BEST YEAR YET!

It’s a brand new year and for many of us in the palm oil industry, it’s the time to take a moment and reflect on our aspirations and goals. To look back at how far we have come and adjust our course for our future.

Whether you think your last year was success or a failure, the good news is you can always turn things around or reach for even higher goals and aspirations.

Today, I shall be sharing specifically on how you can improve your trading and hedging this year. Below are a few ideas that you could start implementing RIGHT NOW .

I am a quantitative-discretionary trader. I have made it one of my life’s goals to understand how commodity markets move, to understand how to predict their movements, and to understand the limits of what can be predicted.

In palm oil futures trading and hedging, part of the answer lies in the nature of the market itself. What we call “the market” is actually the end result of the interactions of thousands of traders across the gamut of size, holding period, and intent. Each trader is constantly trying to gain an advantage over the others; market behaviour is the sum of all of this activity, reflecting both the rational analysis and the psychological reactions of all participants.

The main problem is not having a method that works. You cannot escape the laws of probability, at least in the long run. If you don’t have an edge in the palm oil market (and most methods do not), then you will lose!

Understanding the nature of the market is a good start, but there still might be something we are missing about the process of becoming a successful trader.

Commodity markets are not random. People make markets and they are irrational much of the time.

I have over time developed a time-tested method with an awesome trading edge and impressive strike-rate. It is a simple Quantitative Technical Analysis approach called G.M.Teoh Trend-Tracker. It has helped me and my associates score consistent success in both trading and hedging CPO.

With the support of the GMT Trend-Tracker, I have consistently defied the conventional wisdom of trading the palm oil market.

BMD CPO FUTURES – 3RD MONTH (WEEKLY)
GMT TREND-TRACKER – BUY & SELL SIGNALS.

01

Let us look at the trading signals generated over the last eight months for CPO futures. There were six distinctive trading-calls generated by the GMT Trend-Tracker over the last eight months. The red-arrow depicts a buy-signal and the blue-arrow a sell-signal (please see chart on CPO above).

As at the close of trading on 7th January, the tracker-lines are in negative convergence, signalling that the market may enter into a bearish phase. The sell-call would only be confirmed upon a successful crossover.

It is as simple as that!

Back-testing over a period 10 years would show the consistency and effectiveness of my method in making trading and hedge calls.

Traders can recall that over the last eight months there were many bullish and bearish fundamental news hitting the market. Some of them impacted price movements and some did not.

It is the movers and shakers of the market that causes prices to advance or decline (the big boys). Margin-calls are the most powerful market-moving factor. My job is to track the activities of the big players not the small players.

My method simply divorced itself from the market noise and focused on the reality of the market – the trend and the timing of a trade or hedge, which is all that matters! Timing is everything.

CME SBO FUTURES –WEEKLY
GMT TREND-TRACKER – BUY & SELL SIGNALS

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The CME SBO futures massive downward trend in the third-quarter of 2015 was successfully captured by the GMT Trend-Tracker. (see chart). During the course of the last eight months, six trading-signals were generated by the system and all the signals resulted in the market moving in the direction of the signals that were called.

We can completely take the fundamental approach to palm oil analysis and be fully academic about our analytical approach and yet be wrong in trading. What matters in markets is the trend. Hedging and trading success can on be achieved by trading the direction and duration of a price move, by definition THE TREND.

NYMEX – LIGHT SWEET CRUDE – APRIL 2016

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The price of Light Sweet Crude Oil ended today at a eleven-year low and there seemed to be no light at the end of the tunnel. The Saudi/Iran conflict may some have impact on prices in days to come. Wondering aloud – what would happen if Saudi’s oil pipeline are destroyed? Continuation of the bearish trend would have negative impact on biodiesel. Goldman Sachs declared that crude oil would sink to USD 25-20 per barrel in 2016.

Over the last sixteen months, price volatility and trend in crude oil prices were captured successfully by our GMT TT. Seven trading signals were issued and they all resulted in prices moving in the direction of the trading signals (pls see chart). At today’s close the signals are still calling for more southward move.

FOREX MYR

04It would cause your company a bomb if you are right in hedging  palm oil and wrong in the forex hedge. Over the last sixteen months, the GMT TT nailed all the major moves in an extremely volatile MYR/USD market. Seven clear signals were given during this period (pls see chart). As at today’s close, the GMT TT showed that the MYR is now in a bearish cycle.

FOREX IDR

05The GMT TT was spot-on in tracking the Indonesian rupiah. Over the last fourteen months, seven trading signals were triggered. As at today’s settlement, the trading signal remained bearish and called for further weakness for the IDR in the near term

M’SIAN CPO MONTHLY OUTPUT- STOCK – PRICE

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High palm oil stocks in Indonesia and Malaysia would continue to hinder any strong upward swing in prices in the 1st quarter of 2016. With importers mostly buying from hand-to-mouth, stocks would probably only be able to show large declines in the 2nd quarter of 2016.

Judging from the CPO output of the last three years, it would be difficult for the monthly production to dip below the 1.5 million tonnes in the 1st quarter of this year.

I believe a simple, historically tested and proven, trading edge with well managed risk parameters is the foundation for consistent trading success.

If you are serious & desire to have a PERMENANT change on your trading this year, set yourself up for success by attending my signature program, the 1-day Palm Oil Master-Trader Tutorial (MTT) in Kuala Lumpur on 5th March 2016. (Before the KL POC 2016).

You really have to have a method that has an edge. You have to have confidence in that method. I’ve created a pretty extensive trading course that might help set you in the right direction.

You will re-set your trading and hedging blueprint, right there, that day.

That’s what you’ll learn to do at the Palm Oil Master Trader Tutorial.

Don’t just take my word for it. BE THERE and experience it for yourself.

For registration, programme or further details please click on icons above. We can also be contacted at teohgm@gmail.com (Mobile: +6012 268 8121), david@gbworks.com.my   (Mobile: +6012 204 8918)

Sincerely,

G.M.Teoh