Financial Markets' Choppy Price Action Continues.

This week has started out with most markets continuing to stay in the trading ranges that they have been in for the past several weeks. This choppy price action is happening across a wide range of markets, from the stock market indexes, to coffee, to sugar, to the grains, you name it, and there's choppy price action.

Of course. the big problem here for me is that the markets are not giving me any trade entry signals right now. So, I'm having to sit on the sidelines with no open trades right now. This is where trading requires lots of patience when one has to wait and wait for the right trade set-ups.

Volatile Markets Create Wide Price Swings In Option Prices.

The recent volatility in the grain markets, such as, Soybeans,  has caused many of the option prices to swing wildly. For example, the November 2012 Soybean $17 call option could have been purchased for as little as $75 on June 1, 2012. When November 2012 Soybeans peaked on July 20, 2012, the November $17 call option was worth $4,250 at one point during that trading day. Yesterday, July 24, 2012, with the big sell-off in the grains, including Soybeans, the value of the November $17 call option had fallen to an intraday low of $150. It just goes to show that with this kind of volatility, any trades have to be managed very, very carefully. Profits can accumulate-and vanish-extremely fast in these very volatile markets.

Option Trading Opportunities May Be On Horizon In Grains

  After rallying strongly since early June, the grain markets may have finally peaked. For example, November Soybeans prices were down 64 cents yesterday, July 23, and prices are down 51 cents so far today, July 24. These are huge moves in this market. The Corn and Wheat markets have also experienced similar sell-offs. It's certainly too early to say, but the grain markets may be forming tradeable tops.

  Of course, it's way to early to short the grains at this point. Corn, Wheat, and Soybeans need to close below key support levels to confirm  high probability trade set-ups. However, now would be a good time to follow these markets and see what develops.

The Creature From Jekyll Island Is Alive and Well

Ben Bernanke's testimony before congress this week reminded me of a book I recently finished reading. The book, "The Creature From Jekyll Island" by G. Edward Griffin, details the how and why the Federal Reserve was created. The Federal Reserve is actually a banking cartel that was started by some of the wealthiest people in the world in 1910, specifically,  J.P. Morgan, the Rockefeller family, and the Rothschild family of Europe.
The Federal Reserve is referred to as "The Creature From Jeckyll Island" because the plans for the Federal Reserve were drawn up by J.P. Morgan, the Rockefeller representatives, and the Rothschild representatives at Jekyll Island, Georgia in November of 1910. Congress subsequently authorized the Federal Reserve as keeper of the nation's money supply in 1913 through the Federal Reserve Act.

The book is a fascinating read of how the Federal Reserve came into existance and gained control of the nation's money supply.