My August Strategy:
This August my plan is:
Coffee - July-August are seasonally good months to open longs. I opened longs last month and I will continue to hold the position or maybe even increase it if dips happen. Winter will pay back the patience.
Wheat - technical futures trade only. Fundamentals are still in favor of bulls but current rally is mature already. The end maybe just around the corner. I am closely watching US weather updates and Russian crop news. So far, so good. So what? It looks like dancing on the razor's edge in my opinion.
Corn - same as wheat.
Natural Gas - a few days ago we saw a huge drop in prices after a simple and relatively harmless thing - analysts predicted injections, the fact was a bit above their numbers and NG dropped by 8%. Unbelievable if you ask me. I bought it immediately. But 8% moves are no piece of cake. Care must be taken. I hold both ETFs and futures at the moment, I am still bullish but such wild moves make me wonder - what's brewing in the pot? Anyway as long as BAKEGAS (NG rig count) keeps on falling I remain bullish.
Soybeans - on contrary to wheat and corn I hold shorts here. Strange approach some may think. But this is my hedge against wild moves in the grain sector. Besides I do not believe the S has much further potential - it is at historic highs already. Rabobank smart heads talk about USD20 per bushel but same smart heads told us gold at USD2,000 last year. I do not rule this out but the case for both looks similar - both commodities rallied for too long. I keep on shorting till Sep-Oct when crop will be complete and beans be abundant at least for some time. If that won't happen then I will surrender. For now I keep my shorts.
Orange Juice - Ladies and Gentlemen! This is the time when COT is a screeming BUY! The crop just finished in July, no more oranges any time soon. Commercials are at record highs, interest is at terrible lows. Nobody wants OJ. Blood on the streets. Buy and hold till winter. I opened longs in Jan contract and will keep them at least till Dec and as soon as the price hits 120 I will be buying more. I have never seen such a perfect combination of buy signals.
Heating Oil - holding till mid of fall. Price behavior makes me smile. But HO is expensive enough so I will keep my position humble.
Soybean Meal - I am waiting for Soy to start falling and I will be shorting then.
Cocoa - I am watching for fundumentals to become a bit clearer. At the moment CC may move to any side, so the best option is to hold and watch. I am relying on COT report to tell me my course of actions.
Cotton - it may be worthy to open longs but I prefer to wait. It is on my watchlist.
Feeder Cattle - same.
Lumber - here I am watching for an opportunity to open shorts. Basically I want to see LB at around 300 to start shorting. COT picture is almost perfect to short LB.
Sugar - same as lumber.
Oats - same as lumber and sugar.
Live Cattle - COT tell me that bottom might be close. However Others are still high and I want Open Interest to drop to open longs. We shall see.
Lean Hogs - I may consider shorting LH if COT pattern changes. I expect Commercials to drop further. At the same time the price is falling already. Maybe I should have opened my shorts already. We shall see. I am not in a rush.
Again, as last month no interest in metals and no interest in oil. I do not want to be a hostage of US-EU politicians monkey plays. They are waiting for Spain to formally ask for help. They are inspecting Greece progress in cutting fat to the bones. They are not happy with the pace of the recovery and are ready to act if... They are here, they are there, they are saving at any cost... Long story short - stay away from anything that correlates heavily with political developments. Read Jim Rogers and Larry Williams, God bless both of them!