Yesterday’s Outside Reversal in Meal, Negated by Today’s Outside Reversal

Please see the comments and chart I posted yesterday asking the question whether the Meal has finally topped out. That price action was in response to a bearish USDA supply and demand report for the beans, especially the global supply numbers that they announced.
Today, that report was completely ignored. Instead, hedge fund computers began gorging themselves on the meal and the beans early in the session with the result being an enormous reversal day on huge volume, this time to the upside.
In other words, today’s OUTSIDE REVERSAL DAY exceeded the range of yesterday’s reversal day, which had exceeded the range of Friday’s.
Welcome to the idiocy of the modern futures markets, courtesy of both the hedge fund algorithms and the exchange officials who not only allow it, but love it.
I should note that the volume in the contracts that I was tracking actually exceeded the volume of the USDA report day. In all my years of trading, I cannot recall seeing anything remotely like this. Report days generate massive amounts of trading and produce huge surges in volume as the markets react to what is the new demand/supply numbers provided by the USDA.
This is the reason I have to constantly take the gold permabulls to task for their erroneous, breathtaking comments and articles detailing what they naively refer to as “Flash Crashes”. I have no problem with anyone noting huge swings in price but those who propose the Flash Crash theory when it comes to GOLD, use it as evidence that the price of gold is being manipulated by the bullion banks, acting as agents of the Fed, to suppress the price of the metal.

This post was published at Trader Dan Norcini on November 11, 2014.