I want to believe in the Breadbox Rotation, say that commodities have bottomed and they are going much higher. Everything was going swimmingly until Friday of this weeks trade when King Dollar flexed his might. The dollar seems so benign, endlessly whipsawing back & forth but on Friday it went up a healthy .5% and took down the entire soft commodity complex with it. The correlation is truly shocking how intimately tied together the markets are. Dollar Up: Commodities Down. That's the basic inverse relationship. It seems trivial. Sometimes the correlation fades but on Friday the correlation certainly proved true..

So I am torn.. I want to believe in the breadbox rotation. But I am also a dollar bull who believes that our dollar is headed much higher...

Every time I am swinging and it is working I always say I am going for the big move. I just want to do nothing and let it ride.. But sooner or later a big downdraft comes that knocks some reality into me..

As of now I am still holding, swinging long KC coffee, CC cocoa, & ZC Corn. I am short QM Crude Oil...

When I have some more margin I would like to add long DX dollar..

I really don't know what's going to win out but today's trade proved a point.

It's the Dollar vs Everything..

The Brexit event unleashed crazy volatility into markets. As quickly as it fell, it rallied right back to where it was..

However, there have been some very important developments in markets that must not be ignored.

Mainly, as I have been saying forever, watch the strength of the Dollar.

It's become very chic in recent months and weeks to call for the destruction of the US dollar. Driving the Bearish dollar propaganda campaign is the gold-bugs.

You see, gold has been undergoing a massive rally. The biggest performers of the year, the gold miners are absolutely killing it. But look at the Dollar. It's has held strong, despite the Bearishness.

The fed isn't raising rates, but it doesn't matter because nobody else is raising rates either. At the end of the day, the US dollar is a safe haven currency. We saw it case-in-point with the Brexit. When black-swan events happen in markets, people turn to the dollar.

https://postimg.org/image/7pfjgezq9/

The Strength of the US Dollar must not be ignored. The magic ratio is still confirming a major trend change from Inflation into Deflation. The Stock market has never held up for long once this trend has traversed the other side of the mountain.

https://postimg.org/image/kuv1mitlt/

The rally in gold & gold miners is certainly impressive but you must keep in mind that gold is not rallying because the dollar is weakening. Gold, dollar, soft commodities, & yen are all rallying in from safe-haven bid.

Investors are sensing that these central bankers are out of tricks and are desperately seeking safety.

It seems absurd that the market is still near all time highs and has essentially gone nowhere for several years now but that is the reality of the situation. The deflationary forces are very real. The macro picture is crumbling globally. I expect many more 'black swans' as markets & economies continue to deteriorate.

We are quickly approaching another earnings season & I expect earnings to continue to deteriorate.

Crude oil has been unable to break and hold above $50. I believe that could prove to be a price-cap. It would not surprise me to see oil head south once again in short-order. I do not believe it will bottom until we finally see mass default and meaningful supply come off-line.

Dr. Copper is sick & dying..

Watch the dollar, watch gold, watch earnings, watch oil, watch copper, watch deflation.

The tide has turned & even though this crazy market in this globally coordinated central bank paradigm remains resilient.

I'm still Bearish.

I don't want to lose what I've got.
If I don't risk money, I stand no chance of gain.

This is the ever-present mental battle of trading markets. 
Knowing when to cut a position is the game.
There is nothing worse than seeing a profit turn into a loss. Whether it be through over-trading or greed. 
But cutting out early, only to see it run away without you is a pretty awful feeling as well..
And if you never cut a losing position at all... Well that's how you take huge hits.

I always have these big macro thesis. I always want to catch a big move. Hit a home-run. But sometimes that causes me to make foolish mistakes. I am no oracle, just a man. I cannot will the market to do what I want. All I can do is speculate and manage risk.

Every day is a battle and nobody knows what this life or these markets will bring.
Your conviction will be tested. Your mental fortitude poked & prodded.
They say let your winners ride but cut your losses quickly.

So when do you cut a position? 
That's the question I cannot answer...
I will say one thing. Lock in those profits. Trail that stop. 
You don't know what this market is going to do and it can turn against you very quickly and knife you in the back.