November 16, 2020
As is the case with all crises, they only remain a crisis if the powers-at-be throw up their hands and say, “I don’t care.” And as this is never, ever the case, every “crisis” I have witnessed in my 40 year commodity career HAS passed, HAS been overcome, which is precisely why many of them fade into memory oblivion for the general public…that is, after they are gone, the masses tend to forget how definitively catastrophic they seemed to be as they were happening. Having most likely watched the markets more than just about anyone reading this (which does NOT make me any smarter), I could sit here and recount INNUMERABLE “crises” that, when they were occurring really did seem like NO HOPE situations…and then, well, they weren’t…Remember Brexit, a smallish “crisis” after the fact, but at the time it was happening, the media and internet yakheads were predicting that Europe was about to absolutely CRASH (!!!), and then take the rest of the world economy down with it…But here we are 4 years later with that same subject STILL unfinalized…but, what a surprise, Europe, and the world are still going strong. Really, DO you remember how LOUD it was back in mid-2016 when the surprise British vote to exit the EU had taken place?
The point is, it’s the SURPRISES that can jolt or crush the markets…which WAS the case with Coronavirus early this year….and I maintain that however bad the numbers now get, Covid is no longer the surprise that it was as we entered 2020, when it generated the biggest, and FASTEST, economic contraction (and reversal back up) in the history of the world…and in the markets. BUT, it is now a “known,” and I believe that its negative influences on growth, our behavior, and the future have been fairly much accounted for in the markets, and once again, this is a crisis (albeit a big one) that has peaked…and the world’s economies, and stocks, will continue doing what is reflected in the long term Dow chart following that I keep showing you several times a year…Stocks and the World Economy will KEEP GOING UP.
When the pandemic hit, equities (making news all-time highs) and the economy were both on a strong upward track...But with this obvious Black Swan (totally unpredictable) event...a monster SURPRISE to the world...Stocks and the World Economy went through the biggest, fastest contraction in history...HOWEVER...However bad the corona virus numbers become going forward, the pandemic is no longer any surprise at all...and yes, vaccines will make a BIG difference...and I believe pent up consumption, economic activity, and stock prices could absolutely go thru the roof...In my view, as outlined on the next chart, the stock market is about to catch up to where it “ought” to have been by now...and it is going to catch up FAST...
And here is a closer look…
So, yeah, BUY THE STOCK INDICES…whether it’s the Dow, or S&P, or the NASDAQ…JUST BUY THE STOCK INDICES.
If you are a long time reader, you will know that I have been almost eternally bullish Stocks for almost 10 years and have probably recommended buying the stock market 50-60 times, just since 2009, and the honest to God truth is, I HAVE NEVER HAD A SINGLE PERSON take the recommendation…LITERALLY…which is why I lean towards not wasting energy on promoting any current option ideas in the stock indices, and generally comment on stocks and the economy as more of a backdrop/influence on the other markets I trade…So I won’t make a specific recommendation here…But if you ARE interested in what might be done, with futures and/or call options, give me a ring and I’ll give you the possibilities.
Stocks and the Expanding World Economy
Will Continue to Push Commodities Higher
(with the exception of precious metals)
Since I started my “Buy Everything” campaign some months ago, we have been experiencing bull moves almost across the board in the agricultural markets…and I continue to believe that will be the case…Quite naturally, each of those markets has its own “cycle” of moving up, consolidating and/or correcting…which is why I presently prefer the sidelines in Corn, Wheat, Soybeans and Lean Hogs…with my current very definite BUYING focus being on Cotton, Cattle and Sugar. Here’s a quick look at all of the major ags…with specific current recommendations in the three I am still owning…and buying.
COTTON LOOKS POTENTIALLY EXPLOSIVE…
Here’s what I would buy here…
FEEDER CATTLE ALSO LOOK READY TO GO…
AND SUGAR AS WELL…
I continue to STRONGLY recommend owning all three at the same time as a “unit”…at a current total cost of $3236…with the reminder that if just one of these works, and the other two totally die, you would still probably come out ahead…Obviously if I am wrong on all three you could lose 100% of what you have on the table…but just as obviously, if all three do even half of what I think they can, the result would be quite positive.
If you think I’m possibly right about any of this give me a call…And if you think I’m wrong, I would definitely want to hear why you disagree.
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