What a lifetime as a trader does to one's mind!
Tomatoes are tainted, what does that mean? There must be a trade there somewhere. What do people replace the tomato with? Onions perhaps? Is there a way to trade from the long onion position? Or maybe I should be buying
. Ketchup is made from tomatoes, but I just can't see me ordering a turkey on rye with lettuce and ketchup. If you spend enough time trading, you realize that regular events in daily life somehow translate into trades.
Two and a half years ago I was in the mall with my son Eric Chase. It was February so the big holiday sales push had faded into memory. Eric grabbed me and dragged me into
. He had to try out the newest games and see if there was a used game trade for himself.
What I saw was a trade. There were three lines filled with people buying games -- both new and used. I couldn't wait to get into GameStop stock. I went to the air with the call. The others looked at me like I was crazy. I told the story about how my 7-year old turned me onto a great looking retail operation. So, as soon as my restrictions were lifted, I bought GME.
To make a long story less long, two weeks later, GME guided positively for the upcoming first quarter and full-year. That stock went to $25 from $18 in a shot -- 38% in a couple of stress free weeks.
The life of a trader...
The massive flooding in the Midwest is wreaking havoc on the nation's corn crop. In Iowa, Indiana, Illinois and Nebraska (the corn belt), rainfall totals are breaking records. Some have received as much as 12 inches in the last three weeks, almost four times the normal amount. Flooded and soggy fields have drowned planted acres and turned unplanted acres into mud pits.
In Iowa during the past week, more than eight inches of rain, or about 1/3 of the normal annual total, has fallen. The result: corn is skyrocketing. Futures have traded to four record closes in a row. The trader in me looks for clues. I am instantly eyeing my "Ag Play," also known as my agriculture play. I have been watching it carefully. Whatever signal I got from the integrated oils not being able to eke out a win last Friday when crude oil raced up $10.75, I am getting that in the Ag play right now.
I can't tell you how much I wanted to see
higher Monday and Tuesday.
Late in the day Monday, with corn already in the record-books for the session, the Ags started to falter. I began to get the same exact feeling as I did when
turned red last Friday with crude ripping.
I sold calls across the board on the Ags. I sold BG October 150 calls, the MON October 170 calls and the
September 300 calls against the Ag play. I sold each for about a $5 premium. I am a bit jittery about the general market. And I get a bit more skeptical when a sector should be rallying with bullish news and isn't. To me, it indicates that longs are looking to lock in winners and buying might be getting tired.
The market has been really choppy. I am anxious to deploy some of the unusually high percentage of cash in the portfolio. I am ever so tempted to add to my
Powershares DB U.S. Dollar Index Bullish
play, and I almost bought more
( PNSN) today, but a late day sell-off and subsequent later-day bounce tells me that the high volatility in the intra-day moves is too dangerous to trade aggressively now.
Volatility is the killer of aggressive portfolio managers, aggressive traders and aggressive 401(k) jocks. So, I did not trade anything new. I sat and watched and waited and finally realized this is a crazy, non-directional market. The next move is counter to the last and then the next is counter to that. I like trending markets and these are not trending.
I have now sold calls against my beloved Ag play and sold calls against some of my long held integrated oils. I am sitting ready for a green light to get more involved but it just isn't here yet. I would love to see the USDX trade solidly above 7400 for the first sign. And an easing of the oil bid would bode well for a backup indicator. But for now, I am obligated to suggest no new positions until things settle a bit or an opportunity arises. Until then...
"Trade with your head, not over it"
At time of publication, Bolling was long C, BP, XOM, CVX, MON, BG, PNSN, COP, POT, UUP and USDX futures, although holdings can change at any time.
Eric Bolling is a host on the new Fox Business Network. Bolling was one of the developers and original panelists (nicknamed "The Admiral") on CNBC's "Fast Money."
Bolling is an active trader specializing in commodities, resource trades and ETFs.
Bolling is a member of several exchanges including The New York Mercantile Exchange (NMX), The Intercontinental Exchange (ICE) and The Commodity Exchange of New York.
After spending 5 years on the Board of Directors at the NYMEX, he became a strategic adviser to that Board of Directors where he assisted in bringing the company (NMX) public. He has been included in Trader Monthly Top 100 in 2005 and 2006. Bolling was the recipient of the Maybach Man of the Year Award in 2007 for his contribution of philanthropy and willingness to de-mystify investing to Main Street.
Bolling graduated from Rollins College in Winter Park, Florida and was awarded a fellowship to Duke University. Bolling was an accomplished baseball player. He was drafted by the Pittsburgh Pirates where he played before his career was cut short due to injuries. He honors his baseball past by sporting the NYMEX trader badge, R.B.I.