Diversify from the DOW and S&P 500 -Safety in the Commodities Alternative

We’ve all made a lot of money with the DOW rising almost 27% in the last year. The DOW is now at 23,000+  and most agree there may be more UP before any major adjustment.  As always, the market will vacillate; we just never know when.  There will be a correction, maybe in a week or maybe six months out.  Sooner or later, it happens, which is why you should consider diversifying.  A lot of baby-boomers lost 30% of their retirement in the 2008 crash.

…Almost 30% losses 30 years ago in 1987.  Stock are a great investment but
some crashes along the way have always happened.
The stock market crash of 2008 occurred on September 29, 2008. -21%
The Dow Jones Industrial Average fell 777.68 points in intra-day trading. 

Every day the Commodity Futures market trades over 4 times the dollar amount of stocks traded.  Fortunately, the prices of Corn, Wheat, Meats, Sugar, Coffee, Cotton, Crude Oil, Gasoline, and precious metals like Gold –do not have prices that directly correlate to the DOW Average or the S&P 500.

For years, wealthy investors have used Commodity Futures as a hedge against stock market failure.  Now you can too. One method of diversity is what I call Time-Farming trades – selling very far out-of-the-money options strategies that are in harmony with the strong seasonal trends in commodities prices.

For instance in the Northern hemisphere, Corn prices are highest when the new crop is in the ground and subject to floods, disease, or even droughts; prices go sky high for the season in June/July. Then, during the last four months of the year as harvest comes around, the risk is over and harvested crops are stored, and the price drops with seasonal predictability.

Mother Nature rules this annual cycle and creates very strong seasonal price trends.

I (and thousands of other investors) often sell CALL options far above the summer price peaks on the December futures – and more often than not -prices drop off in the last four months of the calendar years.


Seasonal Unleaded Gasoline Prices are Due to Federal EPA Mandates on Seasonal Gasoline Blends

Another very strong seasonal price trends exists for Gasoline Futures.  The USA Government through the EPA (environmental protection agency) requires domestic refineraries to blend special gasoline that burns more efficiently during hot weather; this creates a springtime demand for the newly blended gasoline that refineraries MUST sell as mandated by Federal law.  The result in a seasonal rise in Unleaded Gasoline prices.  See the chart below for the 15 year averages of the price of late Winter/ early Spring Unleaded Gasoline prices:

Many smart investors have learned to insulate themselves from the S&P 500 market crashes when they diversify into some strong seasonal Commodity price trends, by selling high-probability trades in harmony with seasonal price trends.  It isn’t smart to try and fool Mother Nature.  In North America, corn MUST be planted in the Spring and harvested in the Fall.  Predictable seasonal price trends can be profitable with smart far out-of-the money option selling – high-probability trading with many trades a 95% chance of full success.

I publish the Time Farming Training Bulletin to specifically teach small and medium investors in what I call “The #1 Option Strategy in the World”.   Read more and decide for yourself in my book: Selling Commodity Options – The Time Farming Income Machine.

I am not a trade advisor or a broker; I am a writer and educator who spent over 25 years as a private risk management consultant for major corporations in agricultural commodities – and I also taught option hedge strategies to commodity brokers.  I urge small and medium investors to do their own trading using free online software of deep discount commodity brokers (like: TD Ameritrade’s ThinkOrSwim, TradeStation’s Futures Plus, and others.)  If you already have $250K to $1 million to devote to this strategy, you can hire a manager to trade for you.  My specialty is to help small and medium investors find a way to gain extra income and get away from the some of the risk of the stock market.  I can show you ways to use your home computer and your wits to create genuine income opportunities.  I can show you a smoother smarter better way to trade.

Until about 5 to 8 years ago, it wasn’t realistic for individual investors to trade this way.  The internet and deeply discounted commissions have leveled the playing field in many ways between the professionals and the private investor.    I offer a FREE 60-day trial to my newsletter: The Time Farming Training Bulletin.  There is no credit card or personal information required to register, only your name and email address.  Sign up HERE

If you haven’t read Selling Commodity Options – The Time Farming Income Machine, please take a look at the listing on Amazon.com; you can read the first chapter with the “Look Inside” feature here: Selling Commodity Options

Available on Amazon.com


Thank you. – Don A. Singletary

The commentary and examples are for teaching purposes only and are not intended to be a trading or trade advisory service. Any investments, trades, and/or speculations made in light of  the ideas, opinions, and/or forecasts, expressed or implied herein on the web site and/or newsletter, are committed at your own risk, financial or otherwise. Trading with leverage could lead to greater loss than your initial deposit. Trade at your own risk.   Investors and traders are responsible for their own investment/trading decisions including entries, exits, position, sizing and  use of stops or lack thereof.  This is not a trade advisory service and is for educational purposes only.

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