Regarding yesterday’s post on the SGG (iPath Sugar ETN) trade idea, I’m still monitoring the charts of sugar futures (/SB) as well as the new proxy for the potential official swing trade on sugar, CANE ( Teucrium Sugar ETN). As SGG has historically been the most liquid sugar ETN, that was my first choice as the proxy for a long trade on sugar, which looks like a potential bottoming play with as much as 25%+ upside potential in the coming months. However, it turns out that iPath is replacing SGG with a new sugar ETN, SGGB, without allowing any new purchases of SGG.
As a new ETN, SGGB is very thinly traded resulting in fairly large spreads (the difference between the bid & ask price). CANE, while still fairly thinly traded (i.e.- low volume), can experience increased spreads at times but tends to trade with a typical 1 cent spread between the bid & ask price. As such, CANE will be the proxy for the next trade in sugar although I am still holding off for now as I’d prefer to see some upside follow through to yesterday’s bullish engulfing candlesticks in SGG, CANE & SGGB. As SGG was ineligible for purchase yesterday & I’m still waiting for some additional confirmation for a long entry, CANE will be listed as a Long Swing Trade Setup with an entry price TBD.