A lot of questions come to mind when I say ‘Fundamental Analysis’-

Why is it important to me?

How is it computed?

What does the economic indicator say about the future?

How might commodities react to the latest economic report?

Many questions, innumerable answers are my reaction towards the above questions. As a market analyst in the commodities market, I try to analyze the economic reports with immense scrutiny to provide a substantial conclusion from which you can refer to each time the information is disseminated in the market. I dare not say it’s a 100% right, but I can say with confidence that what I am disseminated now is the result of careful analysis and a hawk-eye view of the market.

The market runs on two analysis namely, Fundamentals and Technical Analysis. It’s dichotomy of sorts in which you as a trader have to pick the right strategy after I as an analyst provide you with the inputs. As my superior once told the market runs on sentiments which could be both fundamental and technical. Take the example of Crude Oil Inventory news which was announced at November 2011. The inventory increased which theoretically suggested that the prices were supposed to drop. The actual result indicated a hike in the prices. The reason being that off the coast of Marseille in France, 22 oil tankers workers were on strike. 

The above example suggests that the market runs on impending factors and not static ones. But when the impending factors seems to be running dry, then the static ones re-claim its position as the ones affecting the markets. So as an analyst it is imperative to question the authenticity of market moving reports as well as the likely effect on the corresponding commodities.

Innumerable traders search or come across news or indicators in the quest of determining the trend of the related commodities… but sometimes the truth is somewhat hidden from the investors. So the next time, you come across an announcement, make sure of the hidden elements involved as well before placing an order.