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kraft-t
Senior Advisor

Re: Re:Help me understand

That being  the case we would have more limit up situations. I think much of the volume is electronic trades in which the funds are in and out in a manner of seconds trying to exact pennies of fractions of pennies out of a trade.

 

 

kraft-t
Senior Advisor

Re: No one wants to answer my question..

Actually BA, I am really too old to know it all.

hardnox604008
Advisor

Re: Re:Help me understand

First the inflows into index funds elevates all commodites within the index somewhat similarly but with variations according to their individual outlooks. If buying at a particular price exceeds selling, prices rise.

 

Then, if say corn is 3% of the index and it has some bearish fundamentals in a particular quarter, and copper is 3% and has a bullish quarter, at the end of the quarter or whatever the rebalancing period is the fund sells some copper and buys some corn to get back to the index weighting.

 

So while there is variation among commodities as a group they tend to stay up because there is XXX hundred billion dollars of portfolio money allocated there and new allocations keep coming in although not anywhere to the degree that they were flooding in 2006-8.

 

It tends not to change a lot unless general liquidity conditions suddenly tighten and there is net liquidation of the index allocation- then it actually becomes a matter of the old "in a panic you don't sell what you'd like to, you sell what somebody will give you cash for." Then you have the situation that we've seen a couple of times since '08 where the corn market is crashing and people are going, "what changed?"

 

Energies are the big dogs of most indexes.

 

Like I said, once the huge flows into indices leveled off it has not been particularly profitable. Most markets are in contango (carry) and rolling longs into that is a loser. What they're making is mostly a matter of a sort of "dogs of the dow" effect where you naturally take some profits from winners and buy losers as you rebalance.

 

 

sw363535
Honored Advisor

Re: The speculator 2

It still takes a sell to match the buy or market does not move. Open orders don't move market. Even in massive numbers. What am I missin?
GreaTOne_65
Senior Contributor

Re: No one wants to answer my question..

BA, your argument is so completely irrational, it would be hilarious if we knew you weren't serious! Holy shiit, HOW DA MN DUMB DO YOU THINK THIS PRESIDENT IS? Never mind, you have answered this question many times, before. I shouldn't be surprised, when 42% of Mississippi GOP think the President and 52% of Alabama GOP believe he's Muslim, why should I expect any less of you? I really have to hand it to the GOP, the toilet paper network, they have done a terrific job of dumbing down their loyal followers.

bruce MN
Advisor

Re: The speculator 2

Don kraft and nox explain that rather well.  Go read what they say again.  And Kellher expains it very well in the panel interview.  Go watch it again.

ollie2655
Senior Contributor

Re: remember when you

blamed gw for high gas ---looks stupid on your part now or are you showing your hypocriite side

hardnox604008
Advisor

Re: Re:Help me understand

"A quart of wheat for a day's wages, and three quarts of barley for a day's wages, and do not damage the oil and the wine!"

 

I like to refer to it as the Black Horse of the Apocalypse trade.

GreaTOne_65
Senior Contributor

Re: remember when you

Unlike you, I can and did change my mind, until Bush's false economy blew up in his face, and the real reason the price fell, and it was revealed that it was the speculators was the real reason for the price, your da mned right, I thought it was Bush. He was after all, the" oil baron President". Diick Cheney did after all have his secret energy meeting, that has never been revealed, so why wouldn't you question why the gas prices were going up? Oh, wait, scratch that YOU BELIEVE EVERYTHING THE GOPhers tell you.

ollie2655
Senior Contributor

Re: because unlike you

and so many dumocratys i invest in oil and make quite good money at it so i hope obalmo keeps on raising the prices--now grow up and debayte like a man instead of the child you protray--aint this fun