October 20, 2020
None of these Bulls is even CLOSE to being finished…
My experience is that most commodity moves go TREMENDOUSLY further than anyone ever expects…So when you put that together with my very strong conviction that all of the major agricultural commodities have been, and ARE, in decided uptrends…while at the same time, ag analysts everywhere are STILL preaching the bearish side of virtually ALL of these markets? Well, it just reinforces my opinion that we are STILL just in the BEGINNING STAGES of major bull markets…that I will not be thinking in terms of, “Where do they stop?”, until I begin to see at least SOME of the analytic crowd start talking about the upside in Ags…and even then, per my opening line here, we will probably still have a LONG way to go.
I FIRMLY BELIEVE THAT ALL OF THE COMMODITIES I CONTINUE TO RECOMMEND WITH MY “BUY EVERYTHING” APPROACH ARE IN VARYING STAGES OF BULL MOVES…and while all those same wrong way analysts believe we’ve already had relatively big moves (hence all the usual nonsense talk about “overbought”, “overdone”, “too far, too fast” or “too many longs”), I THINK THAT ALL OF THESE BULL MARKETS ARE JUST GETTING STARTED…that relative to the way that all of these commodities have repeatedly moved during the past 40-50 years (charts following)…VERY LITTLE HAS HAPPENED SO FAR…And I say you can take any ideas about “overdone on the upside” and throw them totally out the window…As I’ve pointed out for months, there is an avalanche of market flooded funds out there that is headed into Agriculture, which I consider to be the most undervalued asset class on the planet, and it WON’T be stopping anytime soon…especially now, when the still spreading pandemic is, and will be, presenting the food importing nations of the world (like China) with very real worries about “food security,” whether it be due to import product quarantines, or supply-chain breakdowns, or rampant Covid hitting the farms…or WEATHER…So, guys, I SAY THE BUYING IS NOT GOING TO STOP…Covid is NOT going away…and as its continued SPREAD means no nation on Earth (again, like China) wants to have its already stressed out population dealing with any manner of food shortages, my guess is that the amassing, for storage, of food related commodities WILL continue.
Starting with the long term charts…
I CONTINUE TO RECOMMEND OWNING A “BASKET” OF CALL OPTIONS IN AS MANY OF THESE MARKETS AS POSSIBLE. As always, I will tell you that I never know which market will be the next big “runner,” as well as the fact that any ONE of these markets taking off can easily offset having ALL the rest of them becoming total losers…and beyond that, if two or three get going…or all of them…the result can obviously be quite positive…And of course, if I am wrong about all of them, you CAN lose 100% of what you have invested…The bottom line is that it’s all in the math of what each of these options costs…and what values they might attain, both individually, and more importantly, collectively.
And if you think all of this makes sense, I urge you NOT to think, “I have missed it,” and DEFINITELY do NOT succumb to believing the overwhelming mainstream analysts’ view that I see EVERYWHERE…that being that these markets are “overdone,” or “overbought,” or “due for a correction,” or “near the top,” as those opinions are coming from a herd of people who have been fully bearish for the ENTIRETY of the past 6 BULLISH months.
As I keep repeating, I DO think these moves are JUST getting started…and that we easily may have only seen the first 25% of what we are going to see…and that BUYING HERE IS SIMPLY “GOING WITH” WHAT IS HAPPENING. IT IS NOT TO LATE TO BE GETTING ON. If I believed it was, I would not still be buying and/or adding to our current positions…And as I keep pointing out, there is a LOT of room on the upside of all of these charts.
Here are the options I would buy in each of these markets right now…
Now 20 cents off the lows and I STILL have not seen a single “analyst” (I use that term loosely) recommend buying Cotton…which is perfect and IS the way this stuff works…I really think Cotton is about to become the next “attention getter” on the commodity board. A week or three from now everybody will be talking and writing and “explaining”…and “revising our forecast” about the BULL MARKET in Cotton.
You BUY it here. Odds of a runaway look very high to me here…and NOW.
Enough for one day…Buying the first five markets here would cost $5581…meaning, again, that if just one of them goes…and everything else loses 100%…you still might come out ahead. And if all of them CONTINUE doing what they’ve BEEN doing, the result would obviously be a great one…And yes, if everything goes in the tank, you could lose 100% of what you have on the table…Add in the Feeders, and the number goes up to about $7900…
As I keep noting, I believe that enormous funds, indirectly supplied by the Fed Reserve Banks of the world (who WANT inflation) are being allocated towards owning commodities…and this avalanche of capital is NOT going to suddenly just stop flowing…Most of these markets look somewhat similar for precisely this reason…MONEY FLOW. The spigots are open and I can’t imagine that they will be closing soon.
I keep telling you. If you think my perspective makes sense…and you have the risk capital…DON’T just sit there and think, “I missed it.” Pick up the phone and let’s talk possibilities.
All option prices in this newsletter include all fees and commissions. All charts, unless otherwise noted, are by Aspen Graphics.
FUTURES TRADING IS NOT FOR EVERYONE. THE RISK OF LOSS IN TRADING CAN BE SUBSTANTIAL. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THERE IS NO GUARANTEE YOUR TRADING EXPERIENCE WILL BE SIMILAR TO PAST PERFORMANCE.
The author of this piece currently trades for his own account and has a financial interest in the following derivative products: All of them