New Adventures

My service has been purchased by Trade Genius, and we will continue the adventure from there.  www.tradegenius.co

All the great signals as before, and with more to come.  Stay tuned.  Bob

It Begins

El Nino is rapidly turning into La Nina, and it will affect grain prices.  Usually we see prices  move closer to June, but the weather is already setting up.  Next week a Polar Vortex is rolling through the Midwest, and Canada, and Canada is already reporting a significantly reduced crop and with a warm February/March the wheat crop is sprouting.  A freeze will be devastating.

http://www.accuweather.com/en/weather-news/fresh-round-cold-snow-rain-unsettled-weather-west/56286017

http://www.agweb.com/article/canada-reduces-wheat-output-forecast-as-weather-hurts-crops/

Where now?

We have just had one of the most epic short squeezes in market history.  Every tool was used to lift the market;

• Shorts were squeezed relentlessly
• Volatility was sold (biggest squeeze in years)
• Bonds were sold (auction failures hit records)
• Commodities were lifted (relieving banks from defaults)
• Europe went negative and will now buy corporate bonds
• China is now 250% debt to GDP
• The U.S. bailed on rising rates
• Companies bought billions in stock repurchases.
• No new issues brought to the market

What did it accomplish?  Inflation rate nominally positive, and stock prices flat for the year. They woke up gold, silver, and food.  Companies are borrowing in excess of earnings just to reduce their share count and create an appearance of growth in EPS.  Federal Reserve is the only other buyer lifting the market.

So what?  One of two things Will happen.  The Fed's will crank out inflation, but the wrong kind, the one that acts like a tax; food and energy, and we will recreate 2008 and 2011 events, or we just roll over as this is all the market can handle.

For me I think food prices will be the killer of this whole experiment, and will begin with the first crop deficiency reports.  La Nina is proceeding apace, sugar and coffee are following the script.  By June we will see corn, soybeans, and wheat lift.  But the prices will rise farther than expected for the seasonal trade.  China cannot absorb the price increases as food is already trending higher with Jan/Feb up 8%.  I am pretty sure wages are not following that script.  There goes their little experiment in currency devaluation.  I am pounding on this as no one is looking here, yet prices are lifting.  

For next week, we are seasonally weak, and buybacks are in blackout.  Plus we just squeezed the wedge and closed a gap.  Risk reward supports going short.  I have VXX, with my DBA, and JJG. We also should see a let down in oil on a sell the news from the summit of the OPEC thieves.  Over $40 brings U.S. production back online.   Good luck continuing that ramp.  

Good trading this week.

Rocks, Paper, Scissors

Food and energy trumps the Fed.  Be careful what you wish for Central Bankers of the world.  You have created an environment and put yourself into a very weak position.  Climate is changing from warm to cold in the Pacific (El Nino to La Nina) and the last two times that has happened, 2007-2008, 2010-2011 we had some nasty sell offs.  This time though, the world's population is even less able to absorb the twin shocks of higher energy and food.

The canary in the cola mine is sugar, coffee and Cocoa.  They all started to move already.  I posted these charts before (Scroll down).  They are on long term buys.  Next is cotton, and it is awakening.  Then the grains by summer.

The squeeze on budgets and company margins will be fierce, and this time the Fed has no room to stop the inflation because everyone's debt is so high.

I will profit from this as I am already prepared, but I won't be happy about it.  You have been so thoroughly duped and so many will suffer for the sake of the privileged.

Danger Will Robinson

We broke the wedge overnight.  A close below 1968 confirms the resumption of the down move for me.

Ag Commodity Update

Enjoy, CORN and SOYB have not made a higher high yet, so not yet charting buy/Sell signals.  This is where the long action will be this year.  50% plus return on all of these highly likely.  Swing trades, so hold for weeks at a time.  Subscribe and you will get them real time.

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