New market: Fresh charts to work with

Considering how long I’ve been working in financial services, you’d think that one way or another I will have, at some point, covered most internationally traded commodities, stocks, bonds and derivatives.  Yet every now and then something or someone alerts me to an area that’s not on my radar.  Writing for the South China Morning Post has sharpened my focus on all things Chinese.

Imagine my surprise to find that in Zhengzhou, a city of 9.5 million people on the Yellow River in Henan province (I had to look it up on a map app), they have a thriving commodities exchange.  I’ve been covering Shanghai and Dalian for some time, as well as their stock exchanges and assorted other futures markets.

Bliss! New toys to play with.  I duly added these instruments to my template of charts: candles, clouds, volume and open interest, historical volatility, moving averages and a few oscillators for good measure.  I find it useful having a standardised set up so I can easily compare across asset classes and between the currencies in which they are denominated.

The Zhengzhou Commodity Exchange currently lists 17 different futures contracts, different being the operative word.  Some barely trade, but with names like Indica, Japonica, and early long grain nonglutinous rice, you’ve got to smile.

The busiest ones include white sugar, which is nice to compare with ICE charts, and rapeseed oil, again useful to compare with North American canola.  But the two busiest, both in terms of volume and open interest, are methanol and terephthalic acid.  Yes, I had to Google that too!  Wikipedia tells me it’s an organic compound of the turpentine-producing tree terebinthus and phthalic acid, is a precursor to polyester PET, and is used for making millions of tonnes of those ghastly plastic bottles.  By the way, Borough Market plans to ban the sale of these within the next 6 months.

But the best thing about working with brand new charts is that one can approach them with truly fresh eyes and no preconceived ideas.  Technical analysis at its most pure.  Another way to achieve this is to ask friends for suggestions as to which company shares you should look at, then pick the unknown.

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Posted in Finance, Markets, STA news, Technical Analysis, Trading, Trending
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Disclaimer

The views and opinions expressed on the STA’s blog do not necessarily represent those of the Society of Technical Analysts (the “STA”), or of any officer, director or member of the STA.

The STA makes no representations as to the accuracy, completeness, or reliability of any information on the blog or found by following any link on blog, and none of the STA, STA Administrative Services or any current or past executive board members are liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use.

None of the information on the STA’s blog constitutes investment advice.

About Nicole Elliott

Nicole Elliott

A graduate of the London School of Economics and Political Science (BSc Social Psychology) Nicole Elliott has worked in banks in the City of London for the last 30 years. Whether in sales, trading or forecasting technical analysis has always been the bedrock of her thinking. Key expertise lies within all areas of treasury: foreign exchange, money markets, fixed income and commodities.

She has also added to the body of knowledge of the industry writing the first western book on Ichimoku Cloud Charts. Strong media links and a cult following are due to her prescient calls on the markets and often entertaining format.

Nicole can be contacted at trending@sta-uk.org

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