"What the Wise do in the Beginning, Fools do in
-Warren Buffett -
Sept. 25 1998
Special Hog Report
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 over Nineteen Years you run into all sorts.
The Question was: what did they think about the Pig Market in general?
The answer was a resounding Bearish
Outlook by most.
This was supported by an expectation of a Bearish Quarterly Pig Crop report due out this afternoon.
Most Funds and Non-Professional Traders are ready to - Throw out the Baby with the bath water so to speak- most funds and traders are, rolling the Oct. Shorts to Dec. with Some even Rolling to Short Feb. and June, thus SELLING again.
That's what they do. Only a very
small percentage of Commercials and Professionals are even thinking of
buying. It's a funny thing I did the same basic survey May of 1997 when
Hogs were in the upper 80's.
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.
Recently, I expressed my opinion that a trader should be looking to Buy the Winter and Summer Hogs . Feb. and June 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 recent months of devastation occurring in the Hog market. And think about this.
From a trading standpoint you are entering a period where a fellow is going need Dec. and Feb. Hogs, So to speak. We already know Supply is there. But demand may be perking up a bit in my opinion.
I recommend Well Heeled Bi-Weekly Original Traders maintain the long Posture in Dec. Hogs into the report at this Current time, in addition well margined Traders should follow the Bi-weekly Investment Outlook II and Buy at 3927.
Traders( who can afford it) and Bi-weekly Original traders should Buy Feb. Hogs, 1 at 4307 and 1 at 4252 today if able. I would like to buy June Hogs on Weakness but it's so thin, one should leave it alone. There also should be some interesting Spreads Developing this fall and winter. So Stay tuned.
In any event traders should understand
that it's not uncommon for USDA Pig Crop reports to
result in limit moves for days in either direction, so one
has to be prepared for the worst . By all means if you feel uncomfortable
about taking a position into a report.. Don't
I hope everyone has a great weekend
A ship in Harbor is Safe.. But that's not what ships are built for.
Friday Sept. 25 1998
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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. ADDITIONAL RISK DISCLOSURE IS AVAILABLE.