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.

Updated Trades

R-E-L-A-X

AG is UP

The Last Hurrah is Upon Us

We are through this downtrend line.  Now we have the top of the value range, and a double top. Then, likely AMF.  Everybody was bearish into today, but my signal flashed long for LABU (via BIS puts), FAS, XIV, and SPY (via calls).  We are having a killer year.  All signals posted real time, with stops given and updated.  I priced it for anyone to afford.

Enjoy the trading day.

Ready for the Summit

Yesterday we rejected the downtrend line, and sold off.  It found support and overnight began another attempt at the line.  The market likes to move through its value area, especially if it moves back into that range from either end.  The top of the range is in the 2046 area, and the odds are 80%.  Knowing that China, and the U.S. are providing credit, and dollars, I'll take those odds.

I bought calls yesterday for next Friday, and will likely go long Biotech, and short volatility, as well.  A break below yesterday's low will have me re think my plan.

Good trading all.

Rejection

Dance with the One Who Brought You

OK, we are hitting resistance, and the one's who can move the market did so by shorting Vol and bonds, and buying the most shorted.  We need a break, and this week, is usually the week to get short, and I did with VXX, and SPY puts.  I will close them both at some point this week ahead of the FED and maybe the ECB.

But into more interesting developments.  The El Nino to La Nina is acting as it should be and that is pushing up the Ag Commodities.  So far SGG, NIB, and now JO are on my Weekly time frame buy list (I am holding DBA, which had a nice move this week, as well).  If we proceed as expected, BAL, WEAT, CORN, and SOYB will follow (there was signs of life on the hourly charts).  If you want to make money (20-50% next 12 months) but don't want to trade too much these are your cats.  I will post buy and stops on all of these, for my subscribers, at the ridiculously expensive $12.50/month.

Finally, my performance metrics.  I have been steadily killing it all year, then three weeks ago, my father past away, and instead of shutting it down, I traded distracted and off of the signal that works.  I tell you this not for sympathy, but as a cautionary tale.  Unless you are locked in, don't trade, or suggest trades.  The good news after two weeks of travel and family obligations I got back on track and had another nice week, and still beating the broad market with little drama.

Have a great trading week, and sign up if you want to make money and stay ahead of the trends.

We Hit the Big Wall

Biotech is Ready to Break Out Again

OK, Biotech is on the verge of a 10% move.  We just created a higher high, and now we are ready to assault the $300 range again.  There are three ways to play it.  Buy LABU, IBB, or short BIS.

Food is Starting to Move

We are having an incredible reversal from the positive ENSO phase to the Negative.  (El Nino-LaNina).  This is very trade-able.  Food prices move up shrplt as the agricultural belts are negatively affected.  We will see prices move across all of the trade-able food commodities starting now through next spring.

The first two that are moving, that have ETF's are sugar and cocoa.  Sugar displays a nice higher low, and cocoa has a nice double bottom.  My momentum signal confirms these technicals.

As I think this will be very profitable area to trade, I am going to follow;

• SGG
• JO
• WEAT
• SOYB
• CORN
• DBA
• NIB

I am going to report on a weekly signal, these will be swing trades, and I expect the signal to make us minimum 50% returns.  If you want the signals I am adding them to my normal hourly based trade signals.  If you already subscribe, a bonus, if not the best ROI on $12.50/month you will ever make.