Sugar No. 11
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Do you guys remember the Rough Rice (CBOT) fiasco last year ? One hopes its not the twats at 85 Broad Street or some farmers pumping this thing up 
Quote from Cygnus Atratus:
Do you guys remember the Rough Rice (CBOT) fiasco last year ? One hopes its not the twats at 85 Broad Street or some farmers pumping this thing up
Rice was a good example of using contrarian public opinion to pick a top. When the media started squawking about rice inflation we were less than 2 weeks from a top. When Sams' Club started rationing rice due to public panic buying, it topped it. You didn't even have to look at the chart to short.
I haven't been following sugar, but using the COT, which admittedly can be a sloppy indicator, sugar looks pretty close to a blow-off here. Anybody like any particular option series either short or long to trade a move down?
I got burned in sugar a few years back when I thought Congress would consider sugar ethanol -- still have the scars from underestimating the US Farm Lobby...
This thing could go way way higher, but I'll be looking for chances to pick up cheapo puts or various put spreads along the way, with *lots* of time. High prices should mean vastly increased acreage, and sugar grows *fast*.
Possible problem would be higher oil prices, which aren't hard to imagine at all...
Also of course this thing can zoom to 50 cents, so who knows... That's why I'll only short with small money I think. One thing we can say is that the price won't stay here where it is...
I guess buying a 40cent call doesn't sound too bad either... hmm. Long strangle? Straddle? Put backspreads laddered until they work? Hmm... In any case it seems options are probably the way to trade this beast.
Strategy thoughts for both longs and shorts? Vega, theta, Bueller, Bueller... anyone?
This thing could go way way higher, but I'll be looking for chances to pick up cheapo puts or various put spreads along the way, with *lots* of time. High prices should mean vastly increased acreage, and sugar grows *fast*.
Possible problem would be higher oil prices, which aren't hard to imagine at all...
Also of course this thing can zoom to 50 cents, so who knows... That's why I'll only short with small money I think. One thing we can say is that the price won't stay here where it is...
I guess buying a 40cent call doesn't sound too bad either... hmm. Long strangle? Straddle? Put backspreads laddered until they work? Hmm... In any case it seems options are probably the way to trade this beast.
Strategy thoughts for both longs and shorts? Vega, theta, Bueller, Bueller... anyone?
Suri's weekly chart on previous page displays a clear 3 Push wedge pattern. It does not necessarily mean the end of the trend, but it most likely will provide a tradeable two-legged pullback at the very least. Wait for your favorite reversal setup, ride down through the uptrend line, be prepared for a pullback test, and short again on the second leg. Have fun ...
We may getting within spitting distance of the "Bloomberg top" for Sugar. Up another 5% today (OCT).
http://www.bloomberg.com/apps/news?pid=20601109&sid=aqgoeDfgm48g
http://www.bloomberg.com/apps/news?pid=20601109&sid=aqgoeDfgm48g