I hate when bloggers cover stuff and then don’t follow up. And I’m guilty of this all the time.
Here’s the latest on a few things we’ve talked about recently.
The Wheat Story is huge! Yesterday I talked about rumors of a Russian ban of exports driving wheat futures through the roof as the worst drought in 30 years crippled the fields there.
Well overnight, Vlad the Impaler Putin announced the ban. WSJ, what’s up?
Russian Prime Minister Vladimir Putin banned grain exports for the rest of the year amid severe heat and drought that has kindled fires throughout the country, sending U.S. wheat futures toward their highest open in nearly two years.
September wheat on the Chicago Board of Trade finished the overnight trading session up the daily, exchange-imposed limit of 60 cents at $7.85 3/4 a bushel, an 8.3% increase from Wednesday’s close. That brings wheat’s eight-week rally to nearly 85% from a nine-month low in June.
“Due to the abnormally high temperatures and drought, I consider it expedient to introduce a temporary ban on the export from Russia of grain and other agricultural products produced from grain,” Putin said at a government meeting.
Take one guess what the ag commodities have been doing…
We also talked about the need for a cool head in this market and the benefits of paying attention to cool-headed traders. Leigh Drogen went to cash this morning. Why? Because he can. And because he knows that there are always re-entry points when you don’t feel great about your positions.
Leigh, whaddya got?
I sold out of everything this morning, for a few reasons.
Either I’ve been in the wrong names or just caught a bad tape there, either way my long exposure was not performing the way it should have been. One after another I’ve seen gains get torn away from me by stocks gapping down overnight on news or whatever it may be. Frankly, it doesn’t matter, the only thing that does is the bottom line. It’s ok to be wrong in this business, in fact my trading style is wrong almost half the time, the key is to take your stops and move on, because at the end of the day the winners, if you play them right, will far and away make up for the half of your trades that don’t work. Breakouts don’t always work and momentum stocks have a habit of ending their trends abruptly.
Second, I can always step back in, I don’t run 5 billion dollars, I don’t move stocks, I can buy back in this afternoon if I change my mind (not likely). I see more risk to the downside here than I do to the upside.
How many trading blogs can you think of where the writer admits to having a style that is wrong for the tape half the time?