3 Picks + 5 Reasons to Get in Now

Welcome to the Rude Awakening for January 20, 2021…

Inauguration Day is coming out strong for the markets.

At the open, all major indices are up once again nearing new all time highs.

While right now it looks like smooth sailing in the overall marketplace, I’m always looking for hidden ways to diversify my trading portfolio.

You do that by trading for upside and downside profit potential, and having…

Non-Correlated Investments

This means I look to make investments that are not tied to the overall marketplace, neither directly nor inversely.

They’re investments not tied to equities.

So, today, we’re going to talk about futures contracts in general…

And commodities in specifics.

If you’re not trading commodities, I would definitely recommend that become an area you start to focus on.

You have no idea all the opportunities sitting out there!

In fact, let’s go through them…

Here’s Why I Love Commodities

#1. They are non-correlated in a general sense to what happens in the overall stock market.

Whether corn is going up or down is not really reflected in the marketplace on any particular day… (for example).

#2. There’s no earnings to worry about. The vast majority of commodities market-moving news is preknown or even preplanned.

We know when oil supply numbers are going to be reported. We know when crop production numbers, supply and demand, etc, will be reported.

This means you don’t get a lot of surprises.

#3. Commodities have an innate value.

They can’t go bankrupt like the companies underlying regular stocks and securities can. They don’t go to zero.

(and for anyone who’s wondering “Well didn’t oil go to $0 at one point?” — that was a futures contract on oil. The commodity itself cannot go to zero.)

#4. There’s a tremendous amount of leverage in commodities that can give you an enticing rate of return.

#5. They inherently have supply and demand, which allows for some easy common sense when it comes to pricing.

All in all, trading commodities can be a lot simpler than the type of stock trading you’re used to.

A Few “Softs” to Get You Started

There are a few tickers I’d like to show you today, all of which are soft commodities — or softs.

Examples include coffee, cocoa, sugar, corn, wheat, soybean, fruit, livestock; commodities that are grown, rather than mined… (the latter, like oil, copper and gold) are known as hard commodities.)

The ones I’ll show you today all work in tandem, in terms of their pricing.

Have a great, safe trading day.

See you tomorrow!

Regards,

Scott Stewart

Scott Stewart
Editor, Rude Awakening

P.S. A quick update on a couple of the stocks I alerted you to yesterday…

Morgan Stanley (MS) beat estimates on earnings and revenues for Q4. “[MS] posted record full-year revenues in 2020 of $48.2 billion. The figure eclipsed the $41.4 billion it saw in 2019, despite a challenging economic backdrop,” as reported by Barron’s. This morning it had a strong open at $76.51 and it’s holding.

Another massive winner was our main play yesterday: Netflix.

The Street reports: “Shares of Netflix (NFLX) jumped after the streaming giant in the fourth quarter added more paid subscribers than expected and at the end of 2020 surpassed 200 million streaming subscribers for the first time.”

This morning it’s up nearly 14% already.

We also had U.S. Bancorp (USB) starting to pull back. This morning, they reported meeting earnings expectations and revenues are up year over year. However, the stock is down over 4% this morning, perhaps opening the door for a buy opportunity?

Last but not least is Bank of America Corporation (BAC), which reported earnings beating expectations by 2 cents. Bearish indicators continue to loom, and the stock is going lower toward our expected pullback to the $30 level. Once that happens, it might be another good one to buy.

I hope you are taking advantage of opportunities like these!

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Scott Stewart

Scott Stewart has been trading for decades. He has acted as an analyst and educator on the stock market for just as long. As your Rich Dad's Weekly Cash Flow analyst, Scott works tirelessly to ensure you know everything you need to do when entering into new positions, and adjusting trades as you go along....

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