September 27, 2020
I CONTINUE TO RECOMMEND BEING LONG A NUMBER OF COMMODITIY MARKETS…ALL OF WHICH I VIEW AS BEING IN VARYING STAGES OF QUITE LARGE BULLISH MOVES.
Start with this though…
Even though all we’ve seen recently is a bit of “quiet” weakness in the stock market, I am once again seeing HERDS of Wall St geniuses warning the public NOT to buy/own the market here…And as has been my advice and perspective for decades, as long as you can find ANY noticeable degree of bearish commentary from the brokerage house analysts and “strategists,” as well as all the media’s squawking heads, YOU SHOULD BE BJYING AND OWNING THE STOCK MARKET…
I CONTINUE TO SEE THE STOCK MARKET AS A BUY.
Yes, there are certainly some bulls out there, but here are just a few examples…from this week alone…of what PLENTY of the perennially wrong Wall St and Internet Yakheads are saying…
And take heed of that last red-highlighted headline from Friday…which references the HEAVY investor selling that took place the week of Christmas 2018 (chart below)…and observe what the happened thereafter…
The public’s investors, as a whole, have no choice but to be influenced by all the opinion generated by the financial industry…and all of that recent selling, as always, generally stems from the “WARNINGS” being spewed by the supposed experts…So, let me reiterate, after 40 years in this business, beginning with 11 at Merrill Lynch, I will offer that virtually none of those guys know what they are talking about, and ESPECIALLY when it comes to what the market will do…They all look good and SOUND good but they DON’T know…And any time you get the sense that they are all spouting the same story, you need to trade/invest in the opposite direction. Period.
And do note that all of the Wall Street angst is coming on the heels of, relatively speaking, a very small move down during the past month…In fact, although we obviously had a VERY large break at the beginning of the pandemic, on the chart above, there are NUMEROUS instances when the Dow set back in similar fashion…and it was NOT the beginning of a sell off…
THE STOCK MARKET IS A BUY.
Still Buying “Everything” (except the Precious Metals)
Here are some break chart looks at what has been going on in the markets I have been recommending…and my current recommendations…
I view ALL of these markets as being in SOLID uptrends…and have been for months…Nevertheless, my very definite observation is that the overwhelming majority of agricultural analysts CONTINUE to recommend the short side…on EVERYTHING...and again, I am 150% of the opinion that they will continue to be wrong. As I keep pointing out, I believe there are enormous amounts of capital heading INTO the commodity markets and I therefor continue to look for DYNAMICALLY large bull moves in all of the markets I am recommending. This absolutely does NOT mean I will be right, and if I am wrong it will almost certainly meaning losing money…but that IS the perspective I am trading with…and why I am trying to own a piece of all of these markets.
I truly believe Cotton is PRIMED to explode out of here. As I have frequently noted, 20-30 cent moves are quite common in this market...and I could not draw a chart that looks any more perfect than this...We are now 15 cents off the lows and I have YET to see a single analyst say, "BUY this." Not one...The last few weeks have put people to sleep, and talking about, "Well, the hurricanes didn't move it, so why should it go up now?" NONSENSE. I might be dead wrong but I DO THINK WE COULD BE IN THE 80'S WITHIN A MONTH OR TWO.
Enough said. As always, I firmly recommend owning as many of these markets as you can…with the math being that just one of them taking off can easily offset having TOTAL losers in everything else. And while it is obviously possible that I could be wrong about all of these markets, meaning you could lose 100% of what you have on the table, It is also possible that I could have it right on the majority…or even all of them. It’s all about the math really…That being noted, $6258 buys Soybeans, Wheat, Corn, Cotton, Sugar and Lean Hogs (with we’ll see on the Cattle). I continue to think this is a great bet.
Call me if you want to talk about any of it.
All option prices in this newsletter include all fees and commissions. All charts, unless otherwise noted, are by Aspen Graphics.
The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: All of them