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Technically Speaking as of 9/03/10:
As of Tuesday, Aug. 31st, Lg. Funds now own more Net Long Corn Futures than they did at the highs in 2008.
Dec. Corn: My Major Trend remains UP. Dec. Corn traded higher this week, but I see caution signs occurring in the Corn Market. Corn has traded 'Bear Spreads', on occassion, lately. This is when the nearby months are weaker than the deferred months. Bull markets are usually led upward by demand for the nearby contracts. When the buying interest moves mostly to the back month contracts, it often signals that the market is about to change direction, at least temporarily. Also, I believe the Open Interest in Dec. Corn declined as the market went up on Wednesday, and Thursday, (this is a caution sign for me). I am rolling Put Options UP, so the market cannot take all the gains away from me, if it turns back down. I am staying with Put Options because I don't want risk liquidating positions, then seeing the market turn back down, and I lose their also. As of now, I am gaining value, and equity, as the market goes up. That is why I bought Put Options, so I had protection against a fall, with potential for an unexpected rally. For now, the Trend is UP, and today adds to that. You also have to wonder if this is added momentum, or a Blow Off (or the beginning of one.)
Lg. Funds added pretty aggressively again, adding about 46,000 Net Longs. (Adding Longs, and Liquidating Shorts). For Speculators, I would watch for a place to start dabbling in some cheaper, Out-of-the-Money Puts. They usually end up worthless, but if the Funds exit these markets, they could take it down a long ways, in a short time, as they did in 2008.
Nov. Beans: My Trend in November Beans is still UP. Nov. Beans traded down to the 40 Day Ave., again this week, but did not close below it, again. So far it has supported the market, which is what you want to see if you are Bullish. Closes below 9.93 would look negative, above 10.49 look Bullish. Although there was a small increase in Open Interest at one point, overall, it has been trending lower.
Lg. Funds were again liquidating Long Positions and Short Positions, more shorts than Longs, leaving them with a Net Long of about 140,000 Contracts.
I am not doing any more of the Bean Spreads for now. The Bean market has built in some carrying charges lately. I think the spreads will get even wider, but at this time I will not add any more, and I have liquidated a few for a profit. We will look to reestablish them if the spread narrows again.
Dec. Wheat: MyTrend is still UP. Dec. Wheat, like Nov. Beans, has come back to the 40 Day Ave., and is moving up the Ave. at this time. Closes below 6.77 would not look good to me. Closes above 7.30 would be supportive, and keep the Up Trend in tact for now.
Lg. Funds were aggressive liquidators of Wheat, selling about 18,500 Longs and buying back about 7,600 Short Futures.
Oct. L-Cattle: My Major Trend is UP in Oct. L-Cattle. Oct. L-Cattle moved down to the area of the Up Trend Line drawn off the lows of the past few months. Futures prices have remained well above the 40 Day Ave. so far. There was also a Weekly Reversal Up this week, with the Trend. Cash Cattle prices slipped midweek, and the CutOut value did trend Lower all week. Futures have lead the way recently, anticipating the cash weakness. Do they now anticipate some strength coming back into the cutout? And, will they be right? Everyone needs to pick a marketing tool that pleases them, and matches their marketing mentality, and financial situation.
Oct. L-Hogs: My Trend is UP. Another good move UP this week. The Hog market has been very volatile recently, but Oct. L-Hogs are about the same price as they were 4 1/2 months ago. My Trend is UP, but is going mostly sideways right now.
Energies: The Energy markets are moving sideways right now also. We have reached price levels where market participants are, overall, content with the average price currently. One day buyers gain a little advantage, then sellers put a little pressure on, then buyers come back in, and so it goes.
The US Dollar futures slid back down the 40 Day Ave., which is still moving lower, and today the Dec. Dollar Index is below the 40 Day Ave.
The Dow Reversed back UP this week, and the Trend is still UP. sold off fairly hard this week. It is currently Oversold, and could move higher, or sideways, to correct this. There has been a lot of talk about the Dow having a hard sell off, or even a collapse in Sept. This could be liquidation ahead of that fear.
"HYPOTHETICAL"SPECULATIVE TRADING SUGGESTIONS, and "HYPOTHETICAL" TRADING RESULTS:
(I figure commissions on these trades at $100 per round trade, to allow for fluctuations in the fill price.
Bought May 11 L-Hogs, sold April 11 L-Hogs with a spread differencial of less than $3. I will hold this spread until next Spring, or until it widens to $7 or more. I am still trying to add more of these spreads.
I would have bought Dec. Wheat 6.30 Puts for 52 cents = $2,700. Just holding on!
Would have bought November Class lll Milk at 1470. Would have been Stopped out of half @ 15.05 for a profit of about $500, and stopped out of the other half at 14.86 for a approximate profit of $220.
Would have sold Oct. Htg. Oil for 1.9930. My trends turned back up as of Tuesday's close. Would have liquidated on Wed. at 2.0152 for a net loss of about $1,032 per contract.
Would have bought Nov. Lumber Monday at around 213.80. Sell stops at 202.50.
Reccomendations:
To ask about my comments, or share your opinions, call me (Rick Like) at 800-450-4550....Later!
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Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
