As one old timer in this office used to say: “If you can’t see a jackrabbit running between rows of cotton on the 4th of July, you got a good crop.” Check that, as a drive north to Memphis yesterday verified no jackrabbits sighted amongst rows and rows of beautiful cotton. There were fields on dryland that had low spots, washouts, and stunted growth, but dryland cotton in these parts is a small %. There were a few fields of soy that looked late, and small, and uneven, but again these were on rolling non-irrigated acres. We did see one rather large field of cotton that looked like it had been planted 2 weeks ago, so there will be some late harvesting this year.
We exited shorts in mid May for a good cause, and were glad to do so in the mid 60s. However, we did not see a 2 month chop and slop coming, with a rather small range of 4c. Wouldn’t it have been nice to sell options on both sides and rake in some premium? Not having done that, we have been sitting on hands for almost 2 months. Newsletters are itching to find a weather scare – somewhere, anywhere – and they are usually successful. Timing will be everything.
From Dave Toth, tech analyst for RJO. The market is not totally devoid of bullish tech factors as 18 June bullish divergence in momentum and historically bearish sentiment levels are factors typical of base/reversal threat environments. But per such a reversal, the market’s gotta sustain trendy, impulsive gains above some prior corrective high or initial counter trend high. And the miserable relapse after the market broke abov e the 6794 high Monday better evidences a bear market correction rather than a reversal, reaffirming the major downtrend as the dominant tech factor.
As always, please use protective buy and sell stops when trading futures and options.
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