Over the last several days I conducted my own private survey of a variety of traders. When a person has been in the Futures business for almost nineteen Years you run into all sorts.
The question was, what do you think about the Pig Market in general?
The answer was a resounding Bearish Outlook by most, they are ready to ' Throw out the Baby with the bath water. Funds and traders are SELLING into this break , that's what they do. Only a very small percentage of Traders and professionals are even thinking of buying.
It's a funny thing I did the same basic survey (which is conversations with these fellows) last May, at that time most traders were about to 'Sell the Wife and Farm' and BUY. They told me I was Crazy to short the Pig market back then...
I expressed my opinion that a trader should be looking to Buy the Summer Hogs, June and July in this price area, the resounding reply was Your NUTS
Commodity Markets are a funny thing
In my opinion One of most important things a trader needs to do is to See Clearly beyond the noise. So for a moment I would like everybody to look past the current devastation occurring in the Hog market. And think about this.
First, from a trading standpoint you are entering a period where a fellow is going need June and July Hogs, while he does not need August and Oct. So to speak. We already know Supply is there.
Second, the economy is doing great right now, families are buying new homes or moving into existing homes at a near record pace. What I am trying to say is that someone is going to attend a ball game this summer and do a barbecue in their back Yard! Enough Said.
I recommend Traders assume a long Posture in June hogs for the Pull at this Current time, in addition traders should Buy June Sell Oct. at current Levels or Buy July Sell Oct. at current levels. There are a number of Option strategies to consider. Buying Calls in June, sell calls against longs for protection. Hearty Traders could Sell Puts but that's a bit riskier.
Personally I like Buying June and Selling Oct. at the current price region and Holding.
If you are just contemplating trading futures, this may be a good way to start.
If you are a Paid subscriber and I emphasize Paid, and need help with defining your entry and exit, call me or e-maiI.
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It's a long time till June
Friday June Hogs settled at 5767 and Oct. Hogs settled at 5517, that's a differential of 250 over. July Settled at 5795 and August settled at 5665.
Currently the Original BI-Weekly has Long April and Short June Hogs, traders
should Exit the Shorts on Monday, and Buy the same amount of June and Sell Oct. Leaving the April naked long for a bit.
The BI-Weekly II is Currently in the same Position only with fewer contracts, traders should be executing the same there, Buy in the June, then Buy June and Sell Oct. Leaving the April naked long for a bit if you desire.
Traders should treat the April as a very short term trade, we do not want to be too exposed on the long side at this time.
Commercial Producers should consider waiting a bit to hedge, Users should consider buying the current weakness.
If You are not entirely satisfied with their current broker or are looking for one, contact me
I can recommend a very capable fellow who I have known since 1979, is a ex- of the CME and has been in the Futures business for nearly 30 yrs. He runs a great operation. He can also handle international accounts.
I hope everyone has a great weekend
Happy Trading
Bill
Copyright 1998 FuturesCom Investment Publications
THIS PUBLICATION CONTAINS THE VIEW AND OPINIONS OF THE AUTHOR, EXCEPT WHERE OPINIONS ARE ATTRIBUTED TO OTHER SOURCES. WRITTEN PERMISSION IS. REQUIRED PRIOR TO ANY DISTRIBUTION OR REPRODUCTION. FUTURES TRADING IS RISKY AND CAN CAUSE SUBSTANTIAL FINANCIAL LOSS. THE USE OF OPTIONS AND OPTION TRADING INVOLVES A HIGH DEGREE OF RISK. THE USE OF STOPS MAY NOT LIMIT LOSSES TO INTENDED AMOUNTS. SPREAD POSITIONS MAY NOT BE LESS RISKY THAN OUTRIGHT FUTURES POSITIONS. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. SOURCES ARE BELIEVED TO BE RELIABLE BUT NO ASSURANCE IS MADE FOR ACCURACY.
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