Rain was less than desired in Iowa, but about 40% of the WCB and ECB got 1/2 inch to an inch.
Its a mixed bag, but we are on our lows.
Funds lightened their short position as of last Friday in both corn and wheat. I like owning corn puts and owning wheat calls, looking for that spread to pop higher for at least 30 to 40 cents.
Today we trade weather again in the corn. Looking at AG web posts, it looks like if you post anything bearish about corn, you’ll be on a hit list. Group think has a poor track record of success.
A lot of human beings would rather “be right” on their opinion than make money. That’s a market aphorism I picked up from reading the first Market Wizards book. I was lucky enough to meet Ed Seykota over a long weekend in San Francisco back in 1989. He’s a big proponent of the idea that a lot of success in trading is about managing one’s emotions.
When I see a group of folks rabidly defending a losing position, it gives me pause. Corn has gone from a contract high of 6.65 last September 7, 2012. The recent 26 month low is 4.90. That’s $1.75 haircut. That’s 26% of its value. So, if you had $100,000K dollars worth of corn back in September of 2012, its now worth $74,000.
CZ is in a bear channel. What’s the point of fighting this trend? Unless, of course, you are more interested in being “right” than in making money.
Finally, in Sep Dow,
I will continue to watch and be ready to run fast if we settle 2 consecutive days above 15,500 in the September Dow Futures.
One piece of information that makes me more comfortable being short here? Read the following:
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Investors poured more money into US equity funds last week than at any time since the 2008 financial crisis. Some $19.7bn was invested in global equity funds in the past week, while $700m was pulled from bond funds. The value of the S&P 500 index soared to a record $15tn. The week saw $1.7bn of outflows from investment grade debt funds and $1.1bn of outflows from Treasuries as investors have begun turning away from assets regarded as “safe”.
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CER
Here We go Again. Buying the Top? Chasing losers? Time will tell, but unless this money flow keeps up, I think its late in the day for this rally. We are setting up for at least a 1500 pt correction, which would only be 10%.