May 3, 2016
I woke up very early this morning with the thought that the Soybean Meal market had gone up about $85 a ton in just the last 18 trading days…which represents almost a 32% change in value…and realized that it would make sense to TAKE THE MONEY…and MOVE TO THE SIDELINES.
Therefore, we took profits and exited 100% of our Long Position in Soybean Meal today.
I remain fully committed to our LONG WHEAT position, and in fact, increased our long positions there into the weakness that was seen in a number of major commodities today…I may be dead wrong but I do look for Wheat to make a bull move in very much the same fashion we have seen in Soybean Meal…I continue to believe the massive speculative short position in that market will at some point (sooner rather than later) result in a sharp upside explosion in prices.
Here is what we were buying in Wheat today with its 17 cent lower close…
I maintain that this market WON’T go sideways…and that the MASSIVE SHORT POSITION held by funds WILL soon result in a big, fast rally that could easily take Wheat up to the $7.00-$7.50 area…Otherwise, if this market does get pushed lower (and I don’t think it will…but know it can), we will be happy to recoup our investment in the $4.40 area…and then re-establish new long positions using something like the 450 calls and 430 puts…
FROM HERE FORWARD, I WILL NOT BE OUT OF THIS MARKET…I think this market has major upside potential and intend to stay long until I see it happen…As always, I recommend that you own this BEFORE it gets started…while options are cheap…and before you find yourself watching it rise and wondering “Where do I get on?”
Give me a call if you want to talk about this…or any other market…There is a LOT going on right now…and with big volatility…which is perfect for the 1&1 approach.
All option prices in this newsletter include all fees and commissions.
The author of this piece currently trades for his own account and has financial interest in the following derivative product mentioned within: Wheat