(originally posted Thursday, March 18, 2004) Shorted the May corn again and got myself in a jam dealing with this serious bull market. I’ve closed my shorts and gone long. Ironically this usually signals a reversal. Don’t you sometimes just feel they’re waiting for YOU…the last hold out. But seriously, during this phase I’ve had to re-learn this is a business of taking losses and I am still not good at that. I watched intra day as cocoa tested resistance and shorted one at 1462 just minutes before going long the May KC at 75.70. I was quite late getting into the coffee when it bounced nicely off support. That bugger gyrates around like a jumping bean.
Having some fun in the 30 yr. Bond market. My gut tells me we’re setting up for a fall but of course, every time they hold or lower interest rates as Greenspan did on Tuesday, we get a rally. I participated in that up-swing quite nicely but I’ve actually been playing them mostly to the downside. This is counter-trend trading and dangerous. What we’re seeing here I believe is profit taking following this incredible and unstoppable run up. It’s fun just to pull out a partial point each day as the longs bank they’re profits.
This phase of a market is called distribution. When they break to the downside after all the small longs have done their final buying from the professionals, we’ll see a violent sell off. My goal is to be there so these small daily positions are just getting me ready. Got myself whipsawed out of the coffee yesterday twice. I hate those days. Got clipped in the bonds today when they announced cornering a ‘individual of high value’. CNN is reporting the opposition is ‘fighting like hell’ in Pakistan so this will be interesting. Might just stay flat tomorrow, being Friday and who knows who might get captured or killed. That’ll screw up the markets for an hour or so. Wouldn’t want to be on the wrong side of that one.