June 30, 2022

I’ll start with this…One chart that I believe clearly demonstrates that ALL of the markets are nothing but the “World’s Biggest Video Game,” and absolutely driven by mob psychology and herd (lemming) mentalities more than anything else.

You need your head examined if you actually believe that the "value" of Cotton just changed by 45 cents within a 3 day period. THE MARKETS ARE A MOB PSYCHOLOGY GAME...I can tell you that a week ago, basically 99% of the people in the Cotton industry had numerous rock solid "reasons" to think that July Cotton was UNQUESTIONABLY headed for $1.75, and NOT about to absolutely CRASH back down to $1.00.

My point is, if you base your trade ideas on the opinions and “logic” that you hear from all the well-heeled, well-spoken analysts, strategists, “experts” and talking heads from the brokerage houses and on the internet, who all SOUND like they understand the markets, I say you are doomed to occasionally and/or perennially become nothing but fodder in the markets…to find yourself absolutely losing your ass on something that, per EVERYTHING you heard, from EVERY analyst you could find, just made SO much sense…For sure, those guys might get it right for the last 10% of a move, when they are all unanimously bleating, “Buy here! It’s going a LOT higher!”, but INEVITABLY, when the turn comes, they will ALL be clueless as to when and why a market starts crashing…and generally will stay that way for a long way down.

THIS IS A GAME. Talk all you want about what matters in the markets…what’s bullish, what’s bearish…but in the end, prices change due to money entering and exiting the markets…of people chasing ideas (based on what they garner from the media), and then “fleeing” when their “certain” gains start turning into totally unexpected losses (“But all the fundamentals are bullish!!”).

This LATE, LATE, LATE extremely popular idea from all the brokerage house geniuses and economists that, “Inflation is rising and nothing seems to stop it!”, is beginning to get blown out of the water…the reality being, we HAVE HAD inflation…And now the price pendulum, without any doubt in my mind, is starting to swing HARD in the opposite direction. Across the board, commodity markets are beginning to go right in the tank.

So look at the Cotton chart above again…

And then Lumber…representing the white hot building industry?

And Copper…representing Construction, Automobiles, and Electronics?

And now take a look at the other row crops, all of which, according to virtually every agricultural analyst I’ve seen, are SUPPOSED to be rocketing higher from here…but definitely are NOT.

Wheat was THE bullish poster child for the war, with Ukraine and Russia being major grain producers, as well as the closing of their highly important Black Sea ports...But look at it...UP with the war...and ever since then a total collapse…when, again, with seemingly every ag analyst on the planet nothing but ROARING BULLISH?

 And Corn was also part of that “Ukraine War is extremely bullish for grains” story…

And then I come to the Soybean Complex…and what I URGE you to do something with…Right here. Right now.

A preface…Today we had a USDA crop report, that outlined, among other statistics, how many acres of all our major crops had been planted this spring, as well as what the estimated final production for each crop might be…For Corn and Wheat, the USDA’s numbers today were considered to be “in line” with what everybody has been guessing going into the report…No surprise, in other words…but Wheat and Corn ABSOLUTELY CRATERED, down 46 & 35 cents respectively, which believe me, was a TOTAL surprise to analysts and the trading masses (not to me). But significantly…and I LOVE THIS…the acreage number for Soybeans was far below the average guess…purportedly meaning lower production that was being expected…and therefore considered, one more time, by the “experts,” to be a “bullish report.” And THAT, to me, is nothing but bearish music…and honestly, exactly the kind of “logic” I want to hear…Right here, right now, when the Soybean Complex, right behind Cotton, Corn, Wheat, Lumber, Copper, etc…looks to be JUST BEGINNING TO ROLL OFF A CLIFF.

Soybeans have been lagging the other markets a bit…but I absolutely, totally believe they are now about to shift into high gear on the downside…and it is here, in Soybeans and Soybean Oil, if you are not short any of this yet, I STRONGLY RECOMMEND YOU START BUYING PUTS.

I firmly recommend spreading funds across all of these markets…but if you just want one trade, right here, right now, I’d say this is it. Soybeans have broken the least, and when you get down to it, they ARE the biggest contract here…And $3-$5 on the downside would NOT be a big surprise to me.

Can’t say it any louder…Call me if you want to participate…

Thanks,

Bill

770-425-7241

866-578-1001

All option prices in this newsletter include all fees and commissions. All charts, unless otherwise noted, are by Aspen Graphics and CRB.

 The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Corn, Cotton, Soybeans, Soybean Oil, Gold