By: Bob Utterback
, Farm Journal
Bob Utterback has more than 26 years of experience and offers producers a disciplined approach to marketing.
Was today give up day for the longs?
Dec 04, 2008
Traders hate to see days like today. It’s give up day for the longs. Several have been trying to (lightly) buy this market. I believe today’s ability to easily break to new lows has triggered stop loss orders. One of the rules you learn in the market is when you’re wrong, keep the loss manageable so you can come back another day. Going for broke can wipe out the bank account.
Several things are forcing us to recommend moving to the sidelines right now. First, the export pace for corn and beans continues to slip suggesting lower prices are not stimulating demand. The trade is getting more concerned about domestic usage as well.
As we have implied for some time now, the outside markets continue to decline—specifically, crude oil. It was down over 6% from yesterday’s close which continues to forecast declining world demand. While I assume today’s break is the result of several hedge funds reducing their long positions, there is still a lot to go.
And this could be a year-end tax situation. Will we see a lot of longs blow out of positions this month rather than take losses into next year?
All of these factors lead us to the conclusion to reduce our long bias as we move into the end of the year. We suggest taking a short break right now from the long side until the end of the month.
If you want to go over details or would like to read more daily recommendations regarding reownership or marketing strategies, email me at firstname.lastname@example.org or email@example.com.
BEFORE TRADING, ONE SHOULD BE AWARE THAT WITH POTENTIAL PROFITS THERE IS ALSO POTENTIAL FOR LOSSES, WHICH MAY BE VERY LARGE. YOU SHOULD READ THE “RISK DISCLOSURE STATEMENT” AND “OPTION DISCLOSURE STATEMENT” AND SHOULD UNDERSTAND THE RISKS BEFORE TRADING. COMMODITY TRADING MAY NOT BE SUITABLE FOR RECIPIENTS OF THIS PUBLICATION. THOSE ACTING ON THIS INFORMATION ARE RESPONSIBLE FOR THEIR OWN ACTIONS. ALTHOUGH EVERY REASONABLE ATTEMPT HAS BEEN MADE TO ENSURE THE ACCURACY OF THE INFORMATION PROVIDED, UTTERBACK MARKETING SERVICES INC. ASSUMES NO RESPONSIBILITY FOR ANY ERRORS OR OMISSIONS. ANY REPUBLICATION OR OTHER USE OF THIS INFORMATION AND THOUGHTS EXPRESSED HEREIN WITHOUT THE WRITTEN PERMISSION OF UTTERBACK MARKETING SERVICES INC. IS STRICTLY PROHIBITED. COPYRIGHT UTTERBACK MARKETING SERVICES INC. 2008.
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