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Hi Steve
Thanks for your email ... gee ...I hardly know where to start.
"... Shuckin', jivin', and dancin' around, ..." ya .... I got that.
"... how exactly do you (or anyone) use the
| information that the funds are long 60,000 contracts of corn? ..."
I'm sure that the newbies in your community college courses ask similar
types of questions about the Dow being at 11,000 or whatever. Of course
you're not going to tell them any thing interesting, i.e., cross-correlation
studies, etc. Instead, just give them some "quick and dirty" TA stuff<G>
But before we get off on a whole list of broker jive Vs trader stuff ... I
need to know where you are on this "thinking" issue.
If it's really about thinking ... then we should probably do it quietly so
as not to disturb anyone. <G>
Best regards
Walter
----- Original Message -----
From: "Steve Karnish" <kernish@xxxxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Saturday, April 22, 2000 7:00 PM
Subject: Re: KW0K/KW0N
| "We would prefer to buy the wheat and sell the corn once it breaks
| back above the 41 cent level and keep risk tight and use an objective of
53
| as it is the bottomside of the chart gap left on 2/14/00 to 2/15/00."
|
| Walter,
|
| My whole approach to the markets is one of a contrarian. To me: putting
on
| the spread at 41 cents (for a big old profit objective of 12 cents) is not
| nearly as wonderful as putting it on at 27 cents. What is "keeping the
risk
| tight"? Buying at 41 and stopping it out at 36 (or putting the stop
closer
| and assuring a loss)? I'd rather buy at 27 and stop it out under contract
| lows.
|
| On another similar subject: how exactly do you (or anyone) use the
| information that the funds are long 60,000 contracts of corn? My biggest
| victories, during the last three years, have come from taking positions
| opposite the funds. When they cover their positions, it can be a whole
| bunch of fun. Examine the track record of the funds, over the long term,
| and I believe you'll find that it's not very stellar. So, the funds are
net
| short wheat and net long (a bunch) of corn. Gee, I'm shakin' in my
| Sorrel's. Bullish consensus tends to adhere to the principle that when
| enough people buy a market and think something is going up, that there is
no
| one left to get long.
|
| What's going to make this spread widen? The apex of the 22 year sunspot
| cycle coming in the next two weeks? The warmest 3 months of weather in
| recorded US history (ushering in a severe drought)? Massive wheat
purchases
| by China? Short covering by the "semi-intelligent" collective of
| ex-Turtles? Who knows?
|
| This is just one position in portfolios that are diversified in many
| non-correlated markets. As Frank Zappa once wrote:
| "I may be totally wrong, but I'm a dancin' fool".
|
| Shuckin', jivin', and dancin' around,
|
| Steve Karnish
| Cedar Creek Trading
| http://www.cedarcreektrading.com
|
| ----- Original Message -----
| From: Walter Lake <wlake@xxxxxxxxx>
| To: <metastock@xxxxxxxxxxxxx>
| Sent: Saturday, April 22, 2000 12:04 PM
| Subject: Re: KW0K/KW0N
|
|
| > Hi Steve
| >
| > I found this on the Allendale site. Is this what you are referring to
...
| > long wheat / short corn spread.
| >
| > Best regards
| >
| > Walter
| >
| > =============
| >
| > The July Wheat/Corn spread has the wheat at a 29 cent premium to the
wheat
| > and after 21 consecutive days of closing above trendline support, it
| failed
| > today. The long term trend of this spread is still down with a life of
| > contract high of 86 cents premium the wheat and a life of contract low
of
| 22
| > cents. 12 out of 16 years the spread has become narrower from now into
| > contract expiration. In 1984 and in 1996 corn was actually worth more
than
| > wheat. We would prefer to buy the wheat and sell the corn once it breaks
| > back above the 41 cent level and keep risk tight and use an objective of
| 53
| > as it is the bottomside of the chart gap left on 2/14/00 to 2/15/00.
| >
| > ===============
| >
| >
| >
| > ----- Original Message -----
| > From: "Steve Karnish" <kernish@xxxxxxxxxxxx>
| > To: <metastock@xxxxxxxxxxxxx>
| > Sent: Thursday, April 20, 2000 1:09 PM
| > Subject: Re: KW0K/KW0N
| >
| >
| > | Walter,
| > |
| > | I way too much of an idiot to figure out the internal goals of the
| > | commercials. I could guess about what "flat price volume" is, but
quite
| > | frankly it would be pure, dare I say: "speculation".
| "Fun-DAH-mental-ly"
| > I
| > | have the knowledge of a third grader (and some 8 year olds, born into
| farm
| > | families, probably have a better understanding). I guess this is all
| easy
| > | to rationalize by saying that all fundamentals end up in the price.
| I've
| > | traded stocks for years by the "symbols" and couldn't even tell you
what
| > | many of the companies do to create revenue. Give me the price history
| and
| > | I'll render an opinion. Over the years, "thinking"
| > | has gotten me into a lot of trouble. So, sorry I can't answer your
| > | question. You still haven't told me: what do you think of long
wheat,
| > | short corn. I currently have my largest spread position in twenty
five
| > | years. Am I going to have to slap Dick Gephardt around to make sure
| that
| > | China gets favored trade status. I understand that the largest wheat
| > | growing area in China is currently at 9% of normal measurable
| > precipitation.
| > | Any thoughts are welcome.
| > |
| > | Take care,
| > |
| > | Steve Karnish
| > | Cedar Creek Trading
| > | http://www.cedarcreektrading.com
| > | ----- Original Message -----
| > | From: Walter Lake <wlake@xxxxxxxxx>
| > | To: <metastock@xxxxxxxxxxxxx>
| > | Sent: Thursday, April 20, 2000 6:30 AM
| > | Subject: KW0K/KW0N
| > |
| > |
| > | > Hi Steve
| > | >
| > | > In the KC wheat markets, I know that most of the spread activity is
in
| > | > rolling May positions into July.
| > |
| >
| >
|
|