HERE
Well look at wheat now. The day after this post wheat DID pull back from its close of 548.25 for two days to 534.25; a slight pull back of about 2.6%.
But what happened after that? As I stated in my previous post, sky was the limit and did wheat futures ever shoot up, all the way up to 627, a rise of 17.4%.
But now I'm seeing a nice time to play the reverse position.
First of all, the markets are recovering, and one of the things that makes commodities such a great investment is their diversification effect, in that they have tended to move inversely or uncorrelated to equities in the past. The markets going up is in no way a sign that so will commodities, and if anythign its pointing towards a weakening of the market; many commodities had a fairly weak day today. Wheat is currently in heavily overbought levels, and has been sitting up there for quite some time now; not to mention volume has slowed down these past few days also. A touch right here on my white trend line could result in a nice downside play in shorting the futures and/or buying puts.
I'm going to indulge, so we'll see how my move pans out.
-Krames
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