Wheat FuturesShort
When technicals fail, revert back to fundamentals
Wheat has been trending upwards with a channel/megaphone pattern so far. The prices were increasing rapidly and near the channel boundary, it exploded. When it could end up is very questionable but it's not hard to understand the recent price increase is purely based on fear.
Ukraine and Russia contribute to a total of about 26% to the Wheat market, even if we assume they completely vanished, it's only reasonable to guess the price should not go more than 26% from the upper channel boundary. But the markets are not rational, and during conflicting and desperate times it may increase up to 50% to the maximum wheat price recorded ever. I hope this would not happen because what happened later was the global financial crisis, and history could very well be repeated.
If you have access to options, buy some puts on wheat. When markets settle the price will crash spectacularly and you can sit with a lot of cash.
Do not short a parabolic market unless you have a lot of money. Buy puts on the parabolic market because all curves become lines in trades. Every parabolic move is short-lived.
Ukraine and Russia contribute to a total of about 26% to the Wheat market, even if we assume they completely vanished, it's only reasonable to guess the price should not go more than 26% from the upper channel boundary. But the markets are not rational, and during conflicting and desperate times it may increase up to 50% to the maximum wheat price recorded ever. I hope this would not happen because what happened later was the global financial crisis, and history could very well be repeated.
If you have access to options, buy some puts on wheat. When markets settle the price will crash spectacularly and you can sit with a lot of cash.
Do not short a parabolic market unless you have a lot of money. Buy puts on the parabolic market because all curves become lines in trades. Every parabolic move is short-lived.
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