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<\/p>\n\tAfter months of consolidating – at horribly depressed prices – it looks like sugar is ready to spike higher.<\/p>\n
\tI’ve been bullish on sugar since April. And, frankly, I’ve been wrong on the trade. Sugar is trading down 15% since I turned bullish on it. But, it looks like the trade is finally ready to turn. Take a look at this chart…<\/p>\n
\t<\/p>\n
\tIt looks like sugar just broke out to the upside of an ascending triangle pattern. This is a bullish pattern that forms as a chart makes a series of higher lows, while also bumping into the same resistance area. The more times resistance is tested, the weaker it becomes, and the more powerful a breakout can be once it finally happens.<\/p>\n
\tIf this is a genuine breakout for sugar, then the price should approach the May high of $0.165 within the next few weeks. That would be a 15% gain from yesterday’s closing price.<\/p>\n
\tAdding to this bullish setup is the current actions of commercial traders – also known as “the smart money.”<\/p>\n
\tCommercial traders are the producers of sugar, the banks that finance sugar businesses, and the institutions that are already dependent on the price of sugar. They usually use the commodity futures market to hedge against a price decline. So, they almost always are net short sugar futures contracts.<\/p>\n
\tBut not now.<\/p>\n
\tRight now, the smart money is net long sugar contracts. And, they’re net long more than at any other time in the past 20 years.<\/p>\n
\tMeanwhile, the small traders – aka the “dumb money” – are net short sugar futures contracts more than at any other time in the past 20 years.<\/p>\n
\tSo, we have a situation where the smart money is betting big-time on a rally in the price of sugar, and the dumb money is betting big-time on a price decline. The last time we had anything similar to this sort of setup was back in mid-2007, just before the price of sugar rallied more than 40%.<\/p>\n
\tI’m not looking for that large of a move this time around. But a challenge of the mid-May high sure looks like a good target for this breakout.<\/p>\n
\tBest regards and good trading,<\/p>\n
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<\/div>\n\tJeff Clark<\/p>\n
\tP.S.<\/strong> If you’ve ever wanted to learn about bitcoin… and actually earn a bit of it in the process… you have to check out my colleague Teeka Tiwari’s new cryptocurrency training seminar.<\/p>\n \tHe’ll talk with cryptocurrency experts about what’ll come from the cryptocurrency space in 2018, and also reveal what he’s calling “the next big thing in cryptocurrencies”… And he’s giving away $1 million worth of bitcoin during the event.<\/p>\n \tIt airs on November 2 at 8 p.m. EST (rebroadcast at 8 p.m. PST). You can automatically register for this free event right here<\/a>.<\/p>\n \tIn today’s mailbag, Jeff answers questions about what traders can – and cannot – control…<\/p>\n \t\tWhat is your opinion on the theory of silver price manipulation on the COMEX [Commodity Exchange] by JPMorgan Chase. Real or theory?<\/p>\n \t\t– <\/strong>Everett H.<\/strong><\/span><\/p>\n<\/blockquote>\n \tJeff’s response: <\/strong>Hi Everett, thanks for writing in.<\/p>\n \tAnybody with a big enough wallet can manipulate prices in the short term. And, in the currency, metals, and commodity futures markets – where volume is limited – a single entity, or several entities working together, can easily pressure prices.<\/p>\n \tIt can and does happen – though probably to a much lesser degree than the conspiracy theorists complain of.<\/p>\n \tBut here’s the thing… If you are a believer in higher long-term metals prices, then price manipulation to the downside gives you a chance to buy gold and silver at cheaper prices.<\/p>\n \tReader Mailbag<\/h2>\n
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