These bull markets are over...and have potentially already begun their collapses…
March 29, 2022
The Ukraine invasion started on the evening of February 24th.
In spite of the fact that the war has been 99% of the global news since then, with seemingly unanimous talking head opinion being that the war was UNQUESTIONABLY bullish for Crude Oil, Wheat, Corn and Soybeans…the facts are:
The Soybean market made its highs that night and is now lower than it was on February 24th.
Corn made its highs 7 trading days later and is now lower than it was on February 24th.
Wheat made its highs 7 trading days later and has since dropped more than 30% in value.
Crude Oil made its highs 7 trading days later and has since dropped as much as 27% in value.
So yeah, all of those markets initially surged on the news…but THE WAR IS NO LONGER A GIGANTIC SURPRISE TO THE PLANET. NOTHING, SHORT OF A NUCLEAR OUTCOME, IS ANY LONGER A SURPRISE TO THE MARKETS…AND AS SUCH, HAS BEEN FULLY ACCOUNTED FOR IN THE MARKET’S PRICES.
I CANNOT MORE LOUDLY STATE THAT I THINK WE HAVE SEEN THE HIGHS IN THESE MARKETS FOR YEARS UPON YEARS TO COME.
I CONTINUE TO RECOMMEND…ESPECIALLY NOW AFTER THIS LATEST ARTIFICAL BURST HIGHER…SHORTING CORN AND THE SOYBEAN COMPLEX WITH BOTH HANDS.
It can be a tough ride anytime you are picking a top…but as the inherent volatility of the futures markets often leads to horrific declines when bull markets finally do end, IF YOU CAN OWN PUTS SOMEWHERE NEAR THE TOP, AND STAY THERE WHEN THE COLLAPSE GETS GOING, IT CAN LEAD TO PROFITS IN VERY HIGH MULTIPLES…AND OBVIOUSLY IF YOU ARE WRONG IT CAN LEAD TO LOSING EVERY DOLLAR YOU HAVE INVESTED…BUT, TO ME, IF YOU CAN GET IT RIGHT, THERE REALLY IS NO BETTER TRADE THAN THIS…
BE SHORT. BE SHORT. BE SHORT.
and STAY SHORT
But part of the game here is being able to BE there when the turn comes…and then, from a purely mechanical trading standpoint, when the price action presents you with potential evidence that the market, dead in the middle of nothing but bullish headlines, IS ROLLING OVER…what you don’t do is get shy about going with it. You DON’T sit there and wonder if it’s going to rally again. You DON’T sit there and look for some perfect spot to get on. YOU EITHER ADD, OR INITIATE NEW POSITIONS, AS SOON AS THE MARKET SHOWS YOU WHAT WE ARE NOW SEEING…WHICH IS, I FIRMLY BELIEVE, IS EVIDENCE OF A TOP IN THAT, IN SPITE OF THE WAR, CORN AND SOYBEANS ARE NOW TRADING AT NEW LOWS FOR THE MONTH.
Here are the options I would recommend right here…RIGHT NOW.
So yeah, there are some big potential numbers here…but none of them are thrown out there just to attract attention. The moves I’m anticipating are based on what are normal percentage moves for all three of these markets…as well as being based on the maybe 1000’s of tops I’ve seen the past 42 years. Markets DO tend to go down faster than they go up…and many tops are followed by outright collapses.
The truth is, I think this is more about executing a game plan than anything else…the game plan being to KNOW that every commodity bull market in history has eventually topped out (and again, without some clear cut warning that it’s time to sell)…and therefore, so too will these three markets…So the game plan has been, and is, to STAY SHORT…and beyond that, it’s simple…When they’re going down, which I believe is already the case…STAY SHORT UNTIL YOU CAN’T STAND IT ANYMORE…TO BASICALLY FORGET THAT YOU ARE SHORT.
Give me a call if you want to get on board with me. In my opinion, this IS the last time you’ll see prices like this for the foreseeable future…that if you ever get short anything, it will be “forever” before you get an opportunity like this again.
And to be clear…You can do all three or just two, in which case one should be Corn, and one in the Soy complex.
Pick up the phone and get a piece of this…
All option prices in this newsletter include all fees and commissions. All charts, unless otherwise noted, are by Aspen Graphics and CRB.
The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Corn, Soybean Oil, Soybeans