No doubt this is a flat out bull market. But all bull markets have set backs, so we need to keep that in mind.
What are the best ways to trade this market:
- If you're a momentum/technical trader, you may be loving the action right now in the strongest performers. At the risk of sounding like your mother - have fun, but be careful! The volatility is really nuts right now, and that means prices can go down as well as up.
- If you're a longer term, fundamental trader (as I am) - take a look at the stuff that is still low, but starting to move up. I look at sugar, coffee, and cotton as great bargains right now.
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As far as bargains are concerned, I'm also looking at some technical indicators that I use that put Lumber at a buy in the neighborhood of 248-250. There was some very heavy volume last week in the May contracts at around 240 giving significant support at that level, so we may not be at a 100% complete bottom, but that kind of volume is a great signal that a floor is in that neighborhood. I'll likely go long sometime early next week using profits from the sugar high this past week.
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