434 points ago I made three different attempts to buy the dip in the Dow. On each trade we were stopped out for small losses. Today, as things in the world have calmed down, the position would have been a 4,340 profit on every contract.
The point to this entry is to have a short memory. Like NFL quarterbacks, you have to have a short memory. There will be more opportunities as we trade within a 1500 to 2000 point range in the Dow Index. Between now and the election, I am sure there will be great opportunities to take advantage of.
Right now, with these indexes. I am content to stand aside. We may have a hard break once again to give us a chance to re-own.
However, after the bearishness of August and September and a general malaise of fear as the EU deals with Greece, I am inclined to sit and wait for another fat pitch.
I like buying 6.50 DEc puts in corn. The consensus is that farmers are not going to sell. Most likely they won’t sell until we get down to the 5.50 or 5.00 level. In the meantime, they have gotten paid to sit and do no marketing for the past 20 months.
Like all humans, they will let their emotions get the better of them, and won’t want to sell until after the $2.00 break in prices. A farmer harvesting 100K bushels of corn has a crop worth 720K dollars now. His break even fear level is that nice round 500K level. He/she does not realize until its too late that now is the time to protect these prices.
Like my 6th grade teacher, Mr. Oneal used to say, quoting the bible about failure to plan leading to pain, “There will be weeping and gnashing of teeth.
I think its a good time to plan for lower corn prices now.
Six months from now, we’ll be able to look at this and know for sure.
That is all.
CER