June 29, 2012
No question…I have been waiting on 3 or 4 trades for quite some time now…which has meant losing money. But I continue to believe, now more so than ever, that there are some BIG things just beginning to happen…Here are some quick looks at the markets in which I am currently positioning.
I learned long ago to always be aware that unexpected events can dynamically change the markets, literally, from one day to the next, and in the commodity markets, one of the biggest, fastest things that ever happens is when we get a drought in the USA’s Midwest…where Corn and Soybeans are grown.
If you watch the weather at all, you should be aware this may be the case right now…The Midwest has been burning up…And one of the other things I have learned is: When there is a potential drought underway, all you can do is, “Get on it. Define your risk, either through options or stops, and let it happen.” If you win, the odds are decent that you will have a chance to win big. If the drought “ends” tomorrow, you are going to lose.
Two of the biggest trades I have ever been on were the summer of 1983 and summer of 1988 droughts…And they taught me, as can be seen on the following charts, when they go, they tend to go STRAIGHT up…So if you have any intention of buying them, as I titled this piece, you do “shoot first” (GET ON), “think later” (figure out how to manage the risk)…You don’t, in other words, wait for the “perfect” opportunity to buy it. The markets are just not that easy…
And here is what Corn and Beans look like now…I have listed no option prices here but there are a number of great ways to use them if you are not comfortable with futures.
And here is my “trifecta”. I believe all three of these markets are going to work in unison…In my old hack opinion, The “crisis” in Europe is past tense. The Eurocurrency is about EXPLODE on the upside. Our Stock market too…And all those people who have taken “safe haven” in bonds are about to get crushed.
Buy the Eurocurrency. Buy Stocks. Short Treasury Bonds….With both hands…
Give me a call if you are interested in anything here…It’s been tough, psychologically and financially, waiting for some of this to happen, but as I told my younger son this afternoon, “Sometimes I really CAN sense when the big times are coming”, and that is EXACTLY where I think I am as a trader right now.
Maybe I’m wrong, but I do think ALL of these ideas are about to connect at the same time…Many of you have been there before with me and will know it DOES happen…But you have to be there when it does…and sometimes this means writing another check…So, if you aren’t in…GET IN. With something…And by all means, if you do think there is money to be made with any of these ideas, and you have the cash to risk, DON’T sit there and “watch it”. DO IT.