As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. This is your chance to ‘look over’ John Thomas’ shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen.
NO Action Trade Alert - (CORN)
Regarding the Teucrium Commodity Trust Corn Fund ETF (CORN) November, 2012 $50-$55 in-the-money bear put Spread
Notice of Extreme Market Move in our existing short position
expiration date: 11-16-2012
Portfolio weighting: 10%
Number of Contracts = ($10,000/100/$4.45) = 23
Corn futures in Chicago are in free fall this morning, with the May, 2013 contract down 23.2 cents to $7.44 a bushel, and we might see a full 30 cent limit move down before the day is out. As a result, the (CORN) November, 2012 $50-$55 in-the-money bear put Spread, has gapped up from our cost of $4.45 to as high as $4.85, a 9% profit in two days.
It appears that the reason for the plunge is the World Agriculture Supply and Demand Estimates (WASDE) report released by the Department of Agriculture yesterday. While the report painted a modestly positive outlook for global grain supplies for next year, there was absolutely no follow through buying in the pits.
It is a classic trader’s nostrum that if you throw good news on a market and it can’t rally, you get the hell out of there and sell it. That seems to be what is happening today. The market now seems to be focusing on the short term negative fundamentals which I outlined in my original Trade Alert on Wednesday (click here for “Playing Corn From the Short Side” at http://madhedgefundradio.com/playing-corn-from-the-short-side/ .
Using these marks, we have already milked 73% of the potential profit from this position. Those who are inclined to take a quick profit here may go ahead and do so. But big down moves in the ags are like cockroaches. There is never just one. So I am inclined to stick to my original plan and run this into expiration. Call me a hog, but when the pickings are easy, why not?
Just thought you’d like to know.
Call Me a Hog!