Commodity Update: The Summer Blues...

Summer Doldrums, Heatwave, Drought, Grains, Cotton, Oil, Gold, Energy...

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“When you see a good move, look for a better one” ― Emanuel Lasker

I keep bringing this up but I should bring it up again. In the summer, volume dries up. False breakouts happen. Frequently, in the summer. As I have said frequently, summer is a good time to move to smaller position sizes. Put money in a yielding instrument. Or take a vacation.

This will not get me any new subscribers, but it will save everyone who is reading this some cash. Saving cash is the same as making cash. For myself. I move to smaller position sizes but keep using my same signals. You have to figure out what works for you. I have had some good summers over the years but I will tell that most of them are flat. June is usually a slightly down. July sees a return. August has been mixed over the years. It is not because you are doing something wrong. It is just because there is no major moves. There will be a move here and there but when volume dries up, the moves become sporadic.

So why do I trade through it?

I have had years where the summers have been good. Also the most important thing that I believe as a trader. I believe that real money is not made by being a pig or smarter than others. I think the real money is made by being prepared. Moreover, positioned properly for the next move. Those choppy summers have mainly led to big moves in late fall-winter.

Low volatility leads to high volatility.

Chop leads to pop.

We anticipate a scorching July and mid-August for the US growing season, in line with our forecasts. The extreme heat is on track to make the latter half of June record setting hot.