Yesterday’s low in Cash Dow was 12,070. today’ high has been 12, 173. If you bought yesterday, please put a sell stop in. With this strategy, you should come away from this position at worse case, with a push. If you can lock in a small profit all, the better.
Now I would sit and wait. Mr. Bernanke is speaking this afternoon. Your guess is as good as mine as to what he will say, or how the market’s will re act..
I do know that after an 806 point down move from the May 2nd high at 12,876, today.. June 7th, just 4-1/2 weeks later, it seems as if indeed, “profits were taken”. These most likely were taken from Johnny come lately’s trying to be momemtum traders, buying new 3 year highs.
Like bather’s at the beach in Jaws, they returned to the water just in time for the 800 pt correction.
What’s the upside target? 12,370. and then 12,400-470.
On to the grains today, The break in corn looks to be a bit over done. Wheat continues to melt lower, as Russia magically “discovered” an extra 6.0 MMT of wheat they forgot they harvested last year. Seems like a case that they got caught speculating their own cash position. I want to be a buyer if WN gets down to 6.90 level. First stop I’d buy would be the May low down around 7.23
Wednesday mornig we have a USDA s/d number. Like always, this is a number where the USDA can say what ever they want. Plan accordingly.
Beans remain mired in a 80 cent trading range, although currently they are near the upper 1/3 of that range. I remain friendly beans, in an attempt to buy on breaks.
If China returns to the market aggressively, that should be supportive. However, if US farmers plant extra bean acres to make up for lost corn acres, it could be an interesting tug of war between bearish growing fundamentals and a bullish demand scenario.
December new-crop corn looks tired to me. We may be taking a breather on the bull run, but Bulls need to be fed daily. Barring a serious weather scare I don’t know what would support the corn. The whole world is bullish corn. Funds are long 350k contracts, the WSJ is running bullish items about hedge funds buying or trying to buy elevators and storage facilities.
If memory serves me correctly, these same NY and Swiss “masters of the universe” were responsible for destroying our mortgage markets, created the internet bubble, drove oil prices up in 08 to 150 dollars a barrel… That being said, to allow these fund manger types to get a foot hold into the supply chain of our food… Well that can’t be positive, long term.
Now I am a total capitalist> And these funds have every right to put their billions where ever they like. All I am saying is that their track record of creating bubbles which end badly should give farmers, producers, and the general US public time to pause. Do we really want these guys monetizing our one great national resource we have left? Agriculture is the one thing corporate America has not been able to outsource to India or China…
Just food for thought.
CER