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November 1, 2021


THE most Overvalued Commodity we trade…?

I first started recommending about Short Soybean Oil about 4 months ago (June27) and so far, same as the Soybean market, it has only gone sideways. Nevertheless, my opinion remains that a severe decline is still only a question of “when”, and not “if”, this will happen. And as always, “when,” I firmly believe, could be beginning ANY DAY NOW. As I have repeatedly stated regarding market tops, there is rarely some bearish news event that takes place “announcing” the decline…Instead, at some unknown point, they just START DOWN, quite often somewhat quickly out of the gate (see Eurodollars quite recently), again off ZERO NEWS, then gain steam and just as often, never look back…

This is precisely why I continue to recommend owning puts in this market NOW…Every time I look at the 50 year chart following, all I can think is, “THIS IS A SHORT. And a BIG one…So don’t get cute and think somebody will ring a bell to tell you it’s time to get on. Just BUY SOME PUTS WITH TIME AND BE THERE NOW.”

I cannot imagine that this market will STILL be here up 4-5 months from now…And when you get down to it, in today’s casino like atmosphere, my observation is that WHEN markets do move, they tend to be going really big…So if it IS going down, I think it’s REALLY going down…SHARPLY and more or less NON-STOP…Just the nature of the beast.

With this being where it is, I am pretty much ready to totally commit to being short and staying short…

The truth is, I think the easy part is just getting in…The hard part will be just staying short when (and yes, if) it starts going down…in big fast “chunks.”

Here’s one option I’d recommend at current levels…

 And just as a related aside…

Give me a call if you think this makes sense…And want to do something with it…Like I said: Get Short. Stay Short. I haven’t seen a commodity bull market yet that didn’t turn back down…and usually in a big way. It’s just the way this stuff works…





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: Soybean Oil

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