Elgrey's  Instablog

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Expat finance professional living and working in Hong Kong.
  • My October-13 Strategy 0 comments
    Oct 2, 2013 2:00 AM

    Time to earn some cash to buy Halloween goodies. Here we go, the plan for October is:

    Soybeans - I continue my shorting stance until USDA releases WASDE report and then I revaluate my trade. Possibly it will be closed.

    Oats - seasonally oats value grows in October. I am long oats at least for a couple of weeks.

    Lean hogs. End of October is the time when pork hits lows. This combined with bearish Hogs and Pigs report and cheap feed grains should support my point of view. COT report is bearish too however it is not perfectly bearish. I am shorting pork in October.

    Cocoa - I will continue shorting cocoa. Hopefully the bulls will give up soon. At least seasonal trends tell me they should. New cocoa is about to come to market. Looking at technical picture market seems like during it is at late 5 wave or early A per Fibonacci theory. Volumes get thinner - a sign of expiring rally. We shall see... On the side note I read a warning from Golden Sacks saying that market expectations went way too fast and too far. One thing I learnt of them is when GS commodity team says something - I listen, GS commodity guys are real good.

    Onto question marks!

    Corn - seasonal trends are slightly supportive, COT report is very bullish, market is in steap contango... All it needs is a tiny spark to explode prices to new heights. Note, that spread between C and W is shockingly wide - $2.50. Let's wait for this spark to happen.

    Natural Gas - weather was not supportive and NG lost almost 20 cents during last couple of weeks. Seasonally, NG starts robust decline during middle of October. I am going to see what happens during coming couple of weeks and make decision.

    That is my long-short plan for October. I am not going to elaborate about technical trades. As for other sectors I do not think that petroleum or metals groups have much of potential this month. I think that this month will not be as turbulent as previous three as most of the issues found their resolution and we are going to see range-trading in these two sectors. Markets have not reacted on issues of unresolved the debt ceiling and public sector shutdown. It seems like markets do not care about tussle in the White House and live own lives. Possibly that everyone is just waiting for Republicans to find ways to accept their defeat in less painful way, accept Obamacare, and approve budget.

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