Play Turner’s Take Podcast Episode 224

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I am working from home while IL has a Stay at Home order in effect.  My office cell is 312-651-4621.  My office phone 312-706-7610 will roll over to my cell phone if you call my trade desk.  This week we talk about the steps that took place so a potential bottom could be made.  I think the market is now heading into a period of wide ranging consolidation. We talk about what to look for and why in the coming weeks for stocks, energy, livestock and grains.  Make sure you take a listen to the latest Turner’s Take Podcast!

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777.  You will receive the newsletter and podcast notifications for free!

Markets we talk about:

S&P 500 – I want to start buying the stock indices on the dips.  The Micro (MES) is $5 per point and the Emini S&P (ES) is $50 per point.  If the S&P is around 2400, that means the total contract value of the Micro is $12,000 and the ES is $120,000.  Just something to keep in mind in addition to the margins.

Energy – I like July RBOB on the dips but that contract is a hard one to trade.  The swings are violent and volume is thin.  I like July Crude oil too.  For those of you who want a more limited risk play, take a look at Dec 20 vs Dec 21 Crude oil.  The margin will be a couple thousand but with the volatility in the markets we have to get used to higher margins and risk for the next couple of months

Dec 20 vs Dec 21 Crude Oil

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777.  You will receive the newsletter and podcast notifications for free!

Soybeans – I think soybeans have some potential over the long term. However, in the short term I think Nov 20 is too high against March 21.  Full carry is closer to 40 cents yet we are at a 20 cent inverse.  I don’t know why SX20 blew out so high over SH21 but I think it comes back down into the range.

Nov 20 vs March 21 Soybeans

Over the long term I want to find a way to get long soybeans (I know above is a bear spread but that is just for the short term).  On the breaks I do like Nov 20 vs Nov 21.  Soybean stocks could get tight this year.  If we have weather issues the bean market will be sensitive to it.  So if and when soybeans break, I’ll be looking at bull spreading Nov 20 vs Nov 21

Nov 20 vs Nov 21 Soybeans

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777.  You will receive the newsletter and podcast notifications for free!

Cattle – I think December 2020 Live Cattle has value in the low 100s.  Take a look at both charts below.  The first is this years trading range.  The second chart is from our friends at Moore Research (MRCI).  In the past 10 years it is rare for Dec LC to get below 100.  I think demand for beef, pork, and poultry will be strong for the rest of the year.  I think the back end of cattle is a good value on the breaks.

Dec 2020 Live Cattle

Historical Dec Live Cattle Chart from MRCI

This Month

I will be working from home. You can call my office number 312-706-7610 and it will roll to my cell phone. My cell is 312-651-4621 and you can reach me there too.  Anything I can do in Chicago I can do from my home office, so feel free to call, text, or email anytime.  Stay safe and lets hope for better news and developments soon.