071709: A very real risk during 'fear cycles' are dramatic rallies in commodity prices that seem to come out of nowhere. This week saw several of these rallies - where prices had broken down and long positions had been 'stopped-out' only to see violent swings back to the upside on light volume. Specifically, The Nasdaq 100, Orange Juice and Cotton (refer to this weeks WCTS blog for more) have reversed their recent bearish price action and forged to new relative highs. While I am reluctant to assume new positions in this notoriously light volume time of year, one can't help but appreciate these quick bullish reversals during this 17.5 year 'fear cycle'. Shorts ought to be careful for the remainder of July and through the dog days of August.
That's all for this issue of the WCTS Spotlight,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com
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