This rally in SX13 is one which should be sold. We are looking at rumors that China bought 3 MMT of beans here while the USDA was shut down. I believe that once those sales are confirmed, that will suck in weak longs to buy beans. That should be the top. That top should be sold.
I had thought we’d get to 12.96 or possibly even 13.18, based on widely followed Fibonacci’s. 13.36 would be the upper limit.
I don’t think we will get that high.
13.00 to 13.05 is an area I want to establish shorts.
Tomorrow Informa will come out with estimated bean yields. If they are north of 42. You will have an interesting problem for bulls.
1) Most farmer are selling beans as they harvest.
2) based on the last COT report, 2 weeks ago- we have funds long over 100K. It will be interesting to see what their position is currently. Unfortunately for the last 2 weeks we’ve been flying blind courtesy of the political theater in D.C.
If we take out 12.63 to the down side, I think you see a break down to 12.25 or 12.00. This rally is giving us the chance to establish shorts; Risk 10 to 15 cents on a continued spike higher. However, if we get a break, you are looking at a 7:1 pay off.
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If you think its a lousy idea, then by all means, fade it. I always laugh when folks write me emails telling me their opinions.
What ever you decide, I hope you find this opinion blog useful.
Some times the best ideas are ideas to fade after all.
We’ll see how this plays out, but I think this rally in SX is one to be sold.
We are sitting in the middle of the range. Look at the air pocket below 12.61…
CER
