Let's take a little detour from the financials we normally look at.

Let's consider one of my arch nemesis marketsâ€"soybeansâ€"the market which has over the years precipitated some of my most relentlessly disastrous non-mechanical judgments plays.  It was always the same mistake, over and over.  It's early summerâ€"let's buy the beans and play them for the big weather scare anomaly.  If we're right, we'll clean up.  If we're wrong, how low can they go?

A floor trader once bitterly described the crop as a weed growing in the rain forest.  His point was to forget about crop damageâ€"the beans are a hearty little plant that can thrive under almost any condition.  Even the worst droughts of the last quarter century, 1988 and 1983, couldn't do much better than spike the market up for a handful of months.  When the party ended, the drop was instantaneousâ€"far more dramatic than the preceding up action, as several hapless traders discovered over the unanticipated rain-soaked weekends.

For a final perspective, look at this year.  No rain in most of Illinois, the country's number one soybean state.  My yard looks like something out of Arizona.  Where are November beans?  $6.02â€"discounted off a whopping high of $7.75.  (Yes, that is sarcasm.)  It's as if the drought never happened.

There's a good historical reason behind the futility of the Weather Play.  Just as I've demonstrated a monthly stock index tendency that plays out over and over again, one can see the same sort of thing in beans, only here, it's a yearly pattern.  As with the indexes, I optimized numbers, demanding only that the long and short durations be equal.  The results say to be long November 1 though April 30.  Be short May 1 through October 31.

I'll repeat that last part.  Be short May 1 through October 31.

Figure 1 displays the full results from 1984 though the present.  Figure 2, for even further emphasis, shows you the tally of the short side only.  (Don't buy beans in the summer!!)

Figure 1: Soybeans 1984 to Present

Figure 2: Soybeans 1984 to Present Shorts Only

Dynamic Monthly Biases for August 29

Flip from long to short in the S&Ps and Nasdaq.  Hold Russell shorts.

The bottom two rows determine the signal.  Dynamic Day One trumps everythingâ€"you always follow it.  When it's neutral, the Monthly Perpetual provides the direction.  Click here for a more in-depth explanation of the rules.

Daily CzarChart for August 29

The bottom row provides the direction of the bias at the open: long (L) or short (S).  When it's neutral, it will read zero (0).  Click here for a more in-depth explanation of the rules.

DISCLAIMER: It should not be assumed that the methods, techniques, or indicators presented on in this column will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on this column are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The author, Tiger Shark Publishing LLC, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

Art Collins is the author of Market Beaters, a collection of interviews with renowned mechanical traders. He is currently working on a second volume. E-mail Art at artcollins@ameritech.net.