Market in a year of healing

Farm and Ranch February 12, 2009 Commodity markets are still in a healing process. That is what Jim Bower of Bower Trading told a marketing seminar at the recent Pacific Northwest Farm Forum in Spokane. He explained a healing market during an interview. Bower: “In a market that has been wounded as bad as this one has been wounded, the market tends to go down and make a technical bottom. Kind of a key point you can focus on. Then if it is true to its form and goes into healing process it will go sideways. It will roll up to the top of the tube, fall back down. Roll back up to the top of the tube, fall back down. In a certain sense that is a cleansing process. That‘s a process is trying to let the market heal. And what it is healing from, it is healing from basically being overbought, overtraded, and as we know in this market in the last six months there was an awful lot of corruption in areas where they didn‘t t think they were in danger. And the world investor really got hurt. In a sideways or tubular market, I call it a healers market and I think that is what we have right now.� Bower says the longer a tubular market goes sideways, when it breaks out to the upside, it usually sets up for a pretty big move because it is saying the market is now healed. He says the soybean markets move up in January was a classic example of a market breaking out of a tubular trade the beans had been in since October. I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on the Northwest Ag Information Network.