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CATTLE TODAY

COMMODITY INSIGHT

by: Jerry Welch

September 7, 2007 -- Let me begin by stating emphatically that I am not BAY, bullish another year. I am not BAY and have never been BAY. I am bullish towards the cattle market for this year. For here and now. Rumors and innuendoes suggesting I am BAY are simply not true. It has all been a misunderstanding that began at an ag show I recently attended.

Following hours of attending seminars, listening to market gurus, making a presentation of my own about the cattle market and visiting display booths, I found myself bone weary tired at the end of a long day. My legs were rubber-like, my feet killing me and I knew I had to sit and relax for a bit. As I plopped down into a nearby chair in the hotel lobby, my legs kind of moved spread eagle and my right foot and shoe happened to bump slightly the fellows left foot and shoe sitting on my right. I thought nothing of it but suddenly he turned to me as if I was a long lost friend and with a broad smile on his face said, "you're BAY, I know you are."

I was taken aback that anyone would say such a thing in a loud voice in the middle a hotel lobby where rumors could spread quickly. Certainly, there is nothing wrong with being BAY, bullish another year. But I just spent nearly an hour at a seminar discussing the cattle market and where it is heading this year and not next. I was surprised that anyone attending my talk would think for even a moment I was BAY.

In a low voice, so not to attract any more attention than need be since several folks were glancing our way I asked, "why do you think I'm BAY?" He replied, "Because in your seminar, you could not explain why prices for nearby cattle futures have softened for '07 but not for '08. You were kind of mamsey pamsey up there. Fidgeting around, nervous like. Even stuttering at times. I figured deep down you were BAY and did not want to come out and 'fess up to the fact."

In a firm voice I said, "there is nothing to be ashamed of if you are BAY but that is not my orientation, my bias. Despite '07 cattle futures falling from contract highs, I still feel the market has an excellent chance to hit new all time highs before the New Year. The problem lately is the market simply got ahead of itself and now a correction of sort is taking place. Believe me, I am very bullish cattle this year, not another year. I'm not BAY!" Unfortunately, I blurted out the word BAY much too loudly and other people in the lobby looked our way.

One gawker standing close heard most of the conversation and started moving towards us. Wearing a baseball style cap, a plaid shirt tucked into jeans with his stomach hanging slightly over and nearly hiding a huge belt buckle that read,"Don't Mess with Texas" and without so much as a, "howdy do" said to me, "You know, I was at your seminar and I thought you were BAY. If you were not BAY, you would have told the audience the cattle market for this year was the best trade you ever made."

Now, I was with a crowd of two. Hearing the words of the fellow with the big buckle two thoughts struck me immediately. One, I kept to myself and the other I soon shared with both men.

The thought I kept to myself was about Dennis Gartmans's Rules for Trading. His Rule #9 states, "Trading runs in cycles; some good, most bad. Trade large and aggressively when trading well; trade small and modestly when trading poorly." In "good times" even errors are profitable; in "bad times" even the most well researched trades go awry. This is the nature of trading. Accept it."

I kept that thought to myself because I could see from the look on both mens faces they needed to hear something more real and less theory than good old Rule #9 which I doubt either would have accepted. But I did share the second thought that hit my mind although I felt neither would accept that answer either.

Before saying anything, I bent over and picked up the heavy plastic bag I was carrying stuffed full of brochures and "give aways" from the booths at the ag show. Straightening myself up and walking slowly toward the hotel exit I said, to both men. As for my best trade? Years ago, I got a boat for my first wife. That was the best trade I ever made." From the look on their faces, neither man believe me. Then again, they did not believed me when I told them I was not BAY.

(The information in this article is the opinion of Commodity Insight's Jerry Welch and subject to change without notice.)

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