ABSTRACT
Technical analysis of commodity charts (EN9: Following the practice of allowing the reader to discriminate between the work of Edwards and Magee and that of the editor, a section on commodity trading, Chapter 16, has been added to the ninth edition. See same.)
A little thought suggests that the variously interesting and signicant patterns that we have examined in the foregoing chapters on stock charts should logically appear as well in the charts of any other equities and commodities that are freely, constantly, and actively bought and sold on organized public exchanges. And this, in general, is true. The price trends of anything for which market value is determined solely (or for all practical purposes within very wide limits) by the free interplay of supply and demand will, when graphically projected, show the same pictorial phenomena of rise and fall, accumulation and distribution, congestion, consolidation, and reversal that we have seen in stock market trends. Speculative aims and speculators’ psychology are the same whether the goods dealt in are corporate shares or contracts for the future delivery of cotton bales. (For illustrations in this chapter, see Figures 16.1 through 16.13.)
It should be possible in theory, therefore, to apply our principles of technical analysis to any of the active commodity futures (wheat, corn, oats, cotton, cocoa, hides, eggs, etc.) for which accurate daily price and volume data are published. It should be, that is, if proper allowance is made for the intrinsic differences between commodity futures contracts and stocks and bonds.
