I realize that it has been quite sometime since I have posted on the condition of the commodity account and it certainly is not related to the performance as it has been doing very well, aside from the Euro and selected Grains that is.
Recently, as in today, we were stopped out of the short cotton trade with an exceptional profit.
I had moved the stop very close to the market so as to lock in the handsome profits. I plan on waiting out a potential counter trend rally in cotton and then entering the short side once again as the worst seems not to be over for cotton.
We were also stopped out of our short sugar trade today as well. To be honest I was simply waiting for that to happen as the market was getting very quiet with very small range days. I kept the buy stop very close and stayed short just in case the quiet activity was a precursor to a collapse in prices. However, the opposite held true and we were stopped out on the open with a 35% profit.
The grain complex is simply teetering on the edge of collapse and this is the only reason I remain committed to the short positions in Corn, Beans, Meal, Oil and Oats. Typically I do not carry so many lines in the same complex but there are times I simply get bitten by the Super Aggressive bug! We are licking our wounds a bit on the Beans, but other than that the grains have not been hitting us too hard. The Oats trade has panned out well and I really tightened up the stop today to lock in about half the profits. It is far from too late to get in on shorting the Grains, especially the Soybeans as they are just on the edge of a major move lower and with the beans once they start going they just go and go and go. This is one of the reasons I love trading Soybeans as they offer some real volatility to trade.
I have been watching the Hogs for quite a while now and they simply continued to decline day after day so obviously there was no real long trading opportunity there. Now however there seems to be some type of stabilization in the Meats and upon another thrust to new lows to shake out the last remaining hardcore long positions I do see some opportunity on the long side of the market. This is going to be a day by day analysis but the Hogs look to be the next big mover so keep then on your radar and really watch them if they make one more smash to new contract lows.
While there are other opportunities in the commodities markets I think we have enough on our plates right now.