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03-02-2013 08:45 AM
Doing Sat AM chart work and am struck by the fact that it is darm hard to find any commodity chart that I'd want to be long.
Softs, meats, grains energies all mostly look lower or flat. Metals MIGHT be due a bounce but also might not which would be extremely bearish- I'll let the markets decide on that one- came out of short silver after about 18 months and I'm not going back in- too much energy required enduring the volatility.
Makes sense to me, really, as US QE, Japan stimulus, UK QE all probably worked through the system or actually well anticipated- now the market wants to know where the next dose of juice is coming from.
Grains have a better story than most other commodities but on the other hand they are richly priced already from a historical standard. Coming off the '12 drought they're halfway home, or maybe more like a third as the SA and Black Sea crops are progressing. More drama to come.
I'm remaing short grains (out of wheat) purely on chart action- they are topped markets until proven otherwise. If I need a fundamental justification I guess it would be that I think the "short crop has a long tail" phenomenon trumps the seasonal.
03-02-2013 12:00 PM - edited 03-02-2013 12:09 PM
Silver seems like a good buy here----Gold should follow....Cocoa looks to be a good buy around 1900.
Sadly, the DJIA is strongest looking chart. It had an outside-higher close week over last 4-5 weeks.
03-03-2013 06:29 AM
Actually with the Sequester working and budget cuts coming could be that the dollar strengthens for a bit. Also with Russias political upheval and so many getting out of commodities in that country the charts could be a little skewed.
03-03-2013 07:14 AM
If the sequester works, and we get a start on reducing govt spending, the dollar should strengthen and interest rates should go up. This should put some pressure on grains , land prices, etc . as inflation worries should diminish.The stock markets sure seem to like what is going on.
Like most markets, it is better to look at what is happening and react to it. Markets have a way of telling you that when you are wrong, and it is a good idea to listen.
03-03-2013 09:15 AM
I do not think this is a long term trend I just think it is a short time of dollar strengthening. So if it lasts a month and new crop corn goes lowere into the last week of March could get interesting watching the acre bidding war.
Futures and physical will have two totaly different tracks for the rest of the year. Physical is gonna trump the paper deal everyday. WOnder how the guys holding pare contracts for feed needs this summer will fair.
Also I gaurauntee that if you can't deliver on a summer contract the livestock guys will not let you out of it.