Friday and waiting for next week USDA—Where’s Beeks?

  • Posted on: March 25, 2011

I will stay short the dow futures here, risking probably another 100 points or so.
For crude oil, we have returned to the scene of the crime, with this resistance at 106.00

I would wait to see if we can sell futures at yesterday’s high around 106.50. If you wanted to go ahead and step out with a short term, low risk position, I would buy a may 99.00 put for 850 dollars. That gets you short for the next 20 days. for a little more time, I would go to june put at 98 for 1.85 or $1,850.00

This is a counter trend trade, looking for another correction lower. If crude explodes higher, the most you can lose is what you pay for the put option.

In the grains today, we were sharply higher yesterday and overnight, but today the longs headed for the exit in a classic “buy the rumor-sell the fact” market movement.

CK settled -12 cents at 690.00 Corn broke 27 cents off its overnight high.

The US dollar position I wrote about yesterday looks good.

Unfortunately, gold never gave me the 1450 print to fill me on my shorts. The high yesterday was 1448.60. I actually had a resting order to sell at 1449.00. Bummer. Of course today we are down at 1428. I would look to buy at 1414 on a dip.

As for the Silver, It seems that sooner or later we will run it up to 40.00. I am patiently waiting to sell it there. I would buy a break in silver down at 36.00 in anticipation of that run up.

That’s about all I can see worth doing currently.
Most people are heading off to Spring Break, so the markets could be very thin over the next 2 weeks. That’s why I like being short over holiday breaks. Panic runs can be exacerbated with thin volume. If a lot of money managers are on spring break, it goes to logic, that the markets will be thinner.

I would look for a lot of business Monday, then nothing in the grains until Thursday and Friday next week when we get the news from the USDA.

One of my clients told me today that his “other broker” lol, told him that the USDA was going to be a non event…

Well, unless he has Clarence Beeks on the payroll, I don’t know how in the hell he could say something like that with a straight face.
Trying to outguess the USDA is like trying to figure out which way a snow flake is going to land.

The fact that there are brokers out there who would tell their clients with a straight face that a major crop report such as Planting Intentions would be a non event, just makes me shake my head.

By the way, if you remember the movie Trading Places, Clarence Beeks ended up in the gorilla cage with the gorilla…. The Dukes ended up broke..

Eddie Murphy, Dan Akroyd, Jamie Lee Curtis and the butler ended up on the beach drinking bloody Mary’s…

Unless you have the real deal information trying to make a bet which way the USDA will jump is insane.

I will say right now if you put a gun to my head, I’d want to be long. I wouldn’t want to be short futures going into this report in the grains.

That is all.
Have a great weekend.

CER