Apr

14

 Wheat and corn are up close to 3% today. Junk following up as well. Why would ag commodities and junk be correlated? Carry?

Jeff Watson writes: 

I haven't looked at that correlation, but am closely looking at the May CBOT/KCBOT wheat spread which is quite inverted and is widening. Somewhere along the line, a great trading opportunity will present itself. However, the caveat is that one only need to look at the 2007 Dec CBOT/KCBOT inversion that caused major mayhem with many of the specs. Market and personal memories of that time suggest that trading any spread of this nature to be similar to walking naked, blindfolded through a minefield. Caveat Emptor.


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2 Comments so far

  1. Arch Stanton on April 15, 2016 12:46 pm

    > Somewhere along the line, a great
    > trading opportunity will present itself.

    That’s a bold prediction!

  2. Jason Humbert on April 24, 2016 11:10 am

    1 day they move in the same direction and the conclusion is they are correlated?

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