We are finally getting some good volatility in the beans, as apposed to the relentless rally we saw which started in June. After a $5.40 cent rally, with an unusual lack of any good meaningful corrections, we finally are getting some action which is, from my perspective, trade able.
Yield reports from across the country are en masse, much higher than expected. Clients who had been expecting 20 to 30 bu a month ago are coming in at 50 to 80 Bu.
Funds are still massive longs. And yesterday’s rally was very light volume. That tells me everyone who wants to be long is already long.
Farmers have the physical crop and they are now in the driver’s seat. However, they are doing the smart thing, selling beans above $16.00 off the combine. This is going to give us natural harvest pressure.
My down side target it $14.75. That fills an old gap on the cash. So, time stamp it. I’d be looking for a break to that level as an initial target.
A break down to $14.00, however, will be a screaming buy. I also like that level for putting on fresh longs because, for months, we couldn’t get above $14.00. That old level of resistance should become good support.
Also, crude oil is something to look at.
In the last 4 days, crude oil has dropped $10.00 a barrel. And interestingly enough….NOT A PEEP FROM THE NATIONAL NEWS MEDIA… Why? Because GOOD NEWS DOES NOT GET ATTENTION.
Back at the end of June we had Crude down at 80.00 a barrel and still high gas prices. We sat through at $20.00 a barrel rally in 3 months. In the last 3 days, we’ve seen almost a 50% retracement. I’d buy calls and get long futures if we trade down to 90.20 WE missed that target today by $1.00. We still have another 2 hours of trade today, however. We still might get there.
Once again, I am writing what my position is before the market trades there. I hate nothing more than guys who write crap after the move. I am telling you now, that I like buying crude between 90.00 and 87.00 a barrel basis the December option.
As for the Stock indexes. I have to admit, I have no desire to be doing anything other than selling new highs and pricing cheap puts below this market. With 47 days left til the election, there has to be some shoe out there waiting to drop.
That being said, this market has been grinding higher climbing the wall of 1) worry, 2) fear and 3) political hatred that characterizes this country. We have been forced to listen to 47 % vs the other 47%, while the election will be decided, as always, by that 6 % who can’t stand the extremes. I consider myself to be part of that 6%. I see the necessity of government, but I don’t want to see it get to big or too powerful.
I am also pretty revolted any time I am unfortunate enough to listen to MSNBC or too much Fox News.
NPR likes to pretend its neutral, but trust me, from someone my perspective of neutrality, if NPR commentator’s had their perfect world, we’d be living out the Utopia only dreamed of from in the wildest hallucinations from the hippie generation in the summer of 1968.
Oh well. At the end of the day, as long as the sun rises, there will be differing political opinions. One can only hope that the future holds opportunities beyond are wildest dreams. I like that philosophy as opposed to being in the survivalist-end of days camp. Trading is like life. As long as you stay disciplined and keep some ammunition and supplies in reserve, there is an opportunity around the corner that can radically change your economic status for the better. Lord knows, there are plenty of opportunities to do the opposite.
CER