November 15, 2021

 I say there is no other way to see this…

that this market is undeniably a MONSTER short…

This is NOT some irreplaceable commodity that the world is going to run out of…and while I certainly do not know what comes next, I absolutely believe it will do what it, and a 1000 other commodity contracts have done following straight up moves to what can only be described as EXTREME HIGHS, and that is, go relatively straight back down.

While it's screaming higher, the market reflects that supply can't meet demand…likely due to unusual circumstances (like the pandemic)…But once prices STOP rising, it indicates that the demand has been met...But then you have prices are stratospheric levels that tend to result in MORE PRODUCTION...and DECREASED DEMAND...And because skyrocketing prices have likely frightened end users into aggressively over-buying out into the future, what you THEN/NOW have is a VACUUM OF BUYERS...while at the same time, SUPPLY HAS BEEN AMPING UP...and quite often, the ensuing result, with “no” buyers and rising supply, is SHARPLY LOWER PRICES.

And do not think you’re going to find any research among analysts to suggest that I am right. Virtually everything out there is full blown bullish…which, honestly, is the only way I would want it, as I HAVE NEVER SEEN A SINGLE TOP THAT WAS ANYTHING BUT THAT…WITH A HERD OF BULLISH “EXPERTS” UNANIMOUSLY CALLING FOR EVEN HIGHER PRICES.

 Here is one option I like here…

I DO think this is about to blow wide open...However, if it did trade back to the 62 cent highs, risk management would argue for selling this option, probably taking approximately a 50% loss...and then waiting for some new sign that the market was potentially failing again...that is, for example, then trading back under 60 cents.

My perspective is 100% that this WILL happen. We’ve been here for six months while the ongoing “story” has been nothing but bullish…and one more time, I would suggest that anybody who would be long…already IS LONG…and the next thing we WILL see is just down, down, down…on no particular news…just a whole lot of selling…with no real buyers to meet it…

My very strong recommendation is to get on this now, while options are relatively cheap…and BEFORE, out of nowhere, it cracks…quite like the Eurodollar market has recently done.

If you think this makes sense and want to do something with it, do give me a call…

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: Soybean Oil