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Senior Contributor

OptionEye - The Cow Guy - Feb 27th

Remember to email me at sws9876@gmail.com to get the morning outlook and afternoon update we send our customers. Easy read that aggregates the day. \

 

Scott

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Senior Contributor

Re: OptionEye - The Cow Guy - Feb 27th

Got mine Scott, Thanks!

What happened to that bean market today?

 

Senior Contributor

Re: OptionEye - The Cow Guy - Feb 27th

We saw an initial spike up on exports followed by a 6500 lot stop order in May futures then the funds came in to take profits at the same time stories were doing the rounds of better weather in SA. 

 

Ultimately it was a big head fake and folks are looking for excuses. Markets with no real story tend to do this from time to time. We should have known the market was going to trade lower after that big stop order....seems like stops always get me out of my shorts at the highs! Ouch. 

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Senior Contributor

Re: OptionEye - The Cow Guy - Feb 27th

I wondered if it might be some end of the month profit taking. If so, plenty of fireworks next week when they come back in for more.

 

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Re: OptionEye - The Cow Guy - Feb 27th

Scott,

 

was it a 6500 lot BUY OR SELL stop?

 

 

i'm assuming u meant buy....but?

 

thanks,

 

c-x-1 

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Senior Contributor

Re: OptionEye - The Cow Guy - Feb 27th

Not Scott, but in his PM newsletter he says more specifically snip:

"a 6,500 lot buy stop order got  tripped, sending May futures another 25 cents higher to $14.45.5 per bushel in the blink of an eye"

 

I am not sure what 6,500 lot means. Would that be 6,500 - 5000bu bean contracts?

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Veteran Advisor

Re: OptionEye - The Cow Guy - Feb 27th

Chinese hedge?

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Veteran Advisor

Re: OptionEye - The Cow Guy - Feb 27th

yes 4wd,

 

that's 6500 contracts X 5000 bu/contract = 32 1/2 mil bu.

 

i bet it's spec $$ being "triggered" in.

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Senior Contributor

Re: OptionEye - The Cow Guy - Feb 27th

I guess I don't understand the terminology used.

I would think hitting a 6500 contract lot buy stop (32.5 million bu) would move the market up much more than 25 cents. Unless those were mini contracts, or perhaps i don't understand the terminology being used.

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Re: OptionEye - The Cow Guy - Feb 27th

sounds like you do understand - the beans have been averaging 250,000 contracts per day traded...about 130,000 in 1st liquid month - today, however, looks like May had about 205,000 lot volume....Not uncommon for a heavier volume day prior to FN, especially when it occurs at trigger price levels.

 

- looking at the 5 min chart, almost 15,000 lots or contracts traded between 8:40 -8:45 am cst which did cause a 25-26 cent range -- where the commercials/producers took the other side of those market bids (assuming spec buying).

 

 

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