Well, I have been thinking the grains were looking tired. If you follow my posts, I had been buying dips and trying to sell new highs.
Quite honestly, I was getting that funny feeling. I had written that I was not sure what to do, and had been stepping back from the market, scaling down position sizes.
Today’s limit down moves in corn, wheat, beans, cotton, rice, were well overdue.
Corn had doubled in the past 6 months, beans had gone from 9.00 a bushel to 14.00 a bushel, Wheat had doubled since its summer lows.
The uptrend may still be in tact. This week will be pivotal. Thankfully, I am not long. Unfortunately, I don’t have a large short position. with limit down moves, however, each contract has gained 1500 in corn, 3000 in beans and 3500 in wheat. Generally I have 1/2 of my usual position size. In other words, I am not loaded up. But, Its a profitable move none the less.
Strategy now is 2 fold. Cover 1/3 of current positions. Adjust protective buy stops on the remaining 2/3. Once you have a profitable position, you must manage. Rule number one, Never let a winner turn into a loser.
If you’re short, then pat yourself on the back. Just don’t break your arm doing it.
By week’s end, we could explode higher again, and these profitable shorts could be dust in the wind. If we don’t get any follow through, the snap back could be equally vicious. I have been through these volatile markets before. Nothing is guaranteed.
That is all.
CER
