June 9, 2021
More times than I can count, I have seen markets go relatively straight up…and at the top have nothing but bullish press EVERYWHERE…and then 6-8 weeks later they have “quietly” gone ALL THE WAY BACK DOWN…which IS what we’re seeing in the Lumber market, whose “shortage” has been ALL over the news in recent weeks…
I don’t show you Lumber as a recommendation…This market is too impossibly thin to trade using futures, and basically has no options…but I will say it would be NO surprise to see it go ALL the way back down to where it started...even when EVERYTHING in the media has been about the "shortage."
I have said it for years…that this IS a mob psychology game wherein the chips are real money…And it IS fairly much a norm that when straight-up bull markets end…with the whole trading world having fully bought in to the same “fundamentals-are-ALL-bullish” STORY that seemingly 99% of analysts are touting…that the next thing you DO see is something of an outright collapse…
AND I ABSOLUTELY BELIEVE WE NOW HAVE EXACTLY THE SAME SITUATION IN THE SOYBEAN MARKET (and a few others).
For those of you who do follow the agricultural markets, FIND ME ANYBODY WHO IS BEARISH SOYBEANS…You won’t…And then ask yourself, beyond a few stragglers, “WHO could possibly be left to buy this market?”
Really. Getting short a market like this, will ALL of the media screaming, “HIGHER!”, is just damn scary…But how many times do you need to see it to know that’s what should be done…Like Lumber…and oh yeah, like Bitcoin, which has certainly been THE financial news story for the past few months…that was at $66,000 just seven weeks ago…with “crypto-experts” saying $100,000 was practically a given…or even $500,000(!)…but by yesterday had just been at $31,000? CUT IN HALF?
I THINK SOYBEANS, LIKE 100’S OF OTHER TOPS I HAVE SEEN…ARE THE SAME THING. MY VERY STRONG RECOMMENDATION IS TO GET SHORT SOYBEANS…HERE AND NOW.
And this is my conservative guess (for real) for what I think we are going to see…
And one more time…Here is how EVERY top since 1979 has ended…And one more time…In EVERY case here, ALL OF THE NEWS AT EACH TOP WAS NOTHING BUT BULLISH.
Soybean Tops since 1979
I view the last month or so, with its sell off, and recovery, as classic topping action…And firmly believe that we ARE about to (imminently) see at least 20-25% on the downside.
I urge you to call me and do something with this…Big USDA report out tomorrow btw…
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: Soybeans