An opportunity in the Soybean Complex. Weekly Piece

An opportunity in the Soybean Complex. Weekly Piece

This week I would like to draw your attention to a possible setup in the Soybean complex. I think a shorting opportunity is coming for Soybean, Soybean Meal, Soybean Oil. Look at the chart below:

It shows all three of them with a seasonal chart for the Soybean (courtesy of Larry Williams). As you can see from it there is a seasonal weakness approaching (for some like Bean Oil it started already).

Also, the COT data shows significant selling by the Commercials. This combined with the approaching seasonal weakness is a good setup.

Now, where to focus our firepower? This is not that easy in this case. All of them have serious advantages like for example SM is the only one of the complex which made a lower short-term high already. But BO is at a significant resistance level.

So what to do when no one of them is giving us an advantage? When I am in such position for me the most important is clarity of the signal (some are still better than the others) and the Risk/Reward. The instrument providing the best combination will be my favourite to play the downside

About all other instruments, I have little to add. You can check what happened with everything mentioned last week. About the new all-time highs in S&P500, well, I still believe we are going higher. That is why this week I've exercised a call option in CSCO that I've bought during last December's debacle. Still, G20 is coming and good news there will literally kick the market higher :)

Let's find your missing piece!

Vassil Banov,
Founder of Piece of Trading

Trades mentioned here are either taken or will be taken by the author if the right conditions appear. They are NOT recommendations nor any of this constitute investment advice. Please read the Risk Disclaimer

Charts made with TradeStation.

TAGS: Soybean, Soybean Meal, Soybean Oil, S&P500, G20, Seasonality, CSCO, Options

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