The wheat market has been on a tear since we booked a 7.3% gain on half of our position in the Teucrium Wheat Fund (WEAT).
But now, the risks for more upside exceed the risks of a significant price setback. So, it’s time to exit the final half of the position.
We may revisit the wheat market on a healthy correction, as problems surrounding this U.S. crop are not going away.
For now, we recommend the following …
| Place an order to SELL ALL my remaining shares of Teucrium Wheat Fund, symbol WEAT, at $8.00 or better. This order is good-till-canceled.
Then IF AND ONLY IF my sell order is filled, CANCEL my order to SELL ALL my remaining shares of Teucrium Wheat Fund, symbol WEAT, at $6.54, STOP. |
New opportunity shorting the S&P 500 Index …
In our June Edelson Institute bulletin we pointed out that stocks are topping out here, although the process has taken a bit longer than expected.
For hard evidence of this, just look at how the tech-heavy Nasdaq-100 Index has lagged in recent weeks. It’s already down 5% from the June high. Meanwhile, the Dow and S&P 500 have held near record highs … at least so far.
But that’s about to change.
Tech stocks also make up more than one-fifth of the S&P 500 Index, making tech its largest sub-sector. And it’s just a matter of time before the S&P catches up with the Nasdaq — on the downside.
The chart below of the S&P 500 Index is showing clear-cut signs of distribution. This is accompanied by falling price momentum.
Added concern for equity markets comes thanks to a trio of Fed member speeches last week, including one from Fed Chair Janet Yellen that warned of rich asset prices.
The Fed appears dead-set on hiking interest rates again this year, while also taking steps to normalize its bloated balance sheet. So, we view this as a warning shot across the bow.
Another catalyst we see that goes hand-in-hand with lofty equity pricing concerns is second-quarter earnings results. Those start coming in next week. And there’s sure to be disappointment when earnings fall short of elevated expectations.
Here’s what to do right away:
| Using 2.5% of the funds you have allocated to this service, buy the ProShares UltraShort S&P500, symbol SDS, at the market. This order is good-till-canceled. |
In the meantime, we’ll monitor risk on the position for you.
Hold all other positions, and stay tuned for new trades coming your way again very soon.
Good investing,
Mike and David
