Winter is here with us. Hope you guys enjoy great weather full of skiing, ice-skating and building snowmen together with your kids. Something I haven't done for many years cause it never snows in Hong Kong where I live. OK, let's get down to business and plan our investments for December.
I want to make a note that I do not suggest any large bets to be transferred into past second week of January as funds will be rebalancing their portfolios during January and first week will be still sleepy as many of them will be on vacations but second and third weeks could be rollercoasters. So if you trade leveraged instruments like futures, options or leveraged ETF you may have second thoughts about staying on the side lines during first weeks. I hope I will be smart enough to do so. Can't win all the money in the World anyway. So, let's roll...
Grains group (W, C, S, SM, BO) - right now this market is a question mark. I would suggest to stay away or slightly bearish. The crops are good, major market trend is bearish but beware of Christmas rallies. They are unexplainable. I do not expect any strong ones but let us be careful. I have a short position in soyoil.
Oil group (CL, HO, RB) - political tensions remain uncleared so I see no reason why markets should recover. However, markets have been terrible oversold during last days after OPEC failed to act. Technically speaking daily Bollinger Bands were breached at lower end so a pullback is a possibility. I do not have any position yet but I am thinking of a modest bearish position. And I will not take it into 2015.
Natgas - I have a short position and I think I will change it into a strangle. I do not think that deviations from USD4.00 be long-lived in December.
KC - I keep on my bearish stance in coffee - rains continue to pour in Brasil and weather is very favorable. Keep on selling rallies.
CC - cocoa crop is good this year and there are talks in press that shortage fears have gone to far. This translates into understanding that funds are bearish on cocoa and unloading cocoa. I see no reason to stay away from this opportunity.
CT - cotton crop is good this year and there are no big news from China demanding huge amounts of cotton. Stay short.
HE - hogs usually decline after Thanksgiving and COT report tells us that commercial users of hogs are bearish. These two add-up into a bearish solution for hogs issue.
PA - I want to remind you about Christmas rally in palladium market. Watch technical indicators carefully.
AC/DC - yeah you heard me right. New album of this superband will be released on 2nd of December. And what is also important is that this album will possibly be the last one considering the age of these guys. So if they perform somewhere around your area - do not miss the chance. Maybe this will be the last.
That's it for December. Stay sharp.