Will China really let the Yuan float? The very thought of it has enthused dormant bulls in Asia, and I believe, as the sun comes up on the East Cost of the USA this morning, traders who are not on vacation will be looking in their closets for their rally shoes.
Even those on vacation, may very well look for their rally flip flops, in anticipation of some follow through here this week.
This should translate well for commodities, as well, as corn wheat and beans are all up nicely this night.
In general, I’ve always liked going home long over a weekend in the Summer. In general, it seems to have been a strategy that payed off.
I can’t tell you how many times I didn’t even want to trade in the pit after 11 AM on a Friday, for fear of walking into a disastrous out trade Monday morning.
If you were not in the pit, a broker couldn’t magically stick you with a position timestamped in the closing bracket.
I think the grains are coiled to pop out of their 3 1/2 month sideways chop fest. The ginsu knife has been set to frappe since our April expiration. No definitive moves either way.
I think this yuan issue will be the catalyst for an up move. And by an up move, I mean more than a 30 cent head fake in the corn. More like a buck, and more like 180 in the Wheat and 2 bucks in the Beans.
There. I wrote it.
I think the lows are in for the next 14 days. The clincher will be the July 4th weekend.
If we come back after that forecast, and there is above higher temps and below avg precipitation forecast, we will rally like a honey moon erection.
A caveat, if however, the forecast is neutral to wet, we’ll see a snap back nasty enough to give us all some whiplash.
After all, this is trading. If it were easy, politicians, news casters and radio talk show hosts would do it for a living.
So, i think you should buy dips, sell rallies and look for an overall 45 degree angle upward and onward. Jun 30th should be a buying opportunity, if the government raises acreage more than expected. If it is a bearish number, I think you fade it. Nothing will stand in the way of a weather market, or more importantly, a good old fashioned demand market.
If the yuan is really allowed to be affected by free markets rather than politicians, it could be the most powerful long term bullish force we have seen in the grains since commodity funds became a force in the markets.
Right now, I am saying be careful being short. There will be moves to take advantage of if you are nimble. However, no one can really be faster than these computers now. High frequency black box traders have ruined the intra day flow of the market. The scalp is gone.
Instead, Be patient. Have resting buy orders below the market. Get filled on your terms. Not the markets.
For Corn and Beans, I like buying dips. In the wheat, look out for vicious corrections. Look out for the wheat to take the brunt of the selling as traders get long corn and beans and sell wheat.
Like always, have an exit strategy. If you get a good profit in something, raise your stop and guarantee your profit.
Good Trading
