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hardnox604008
Advisor

wave count

SP 500 and the Dollar have been pretty good proxies for the general health of the risk trade that tends to have big impact on grains and other comms.

 

The waves count out pretty clearly as on the verge of a 3rd of a 3rd down in the SP, the inverse in the Buck.

 

3 of 3's tend to be the heart of the move and are often the strongest and longest of all waves.

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3 Replies
hardnox604008
Advisor

Re: wave count

After yesterday's euphoria that retail sales were only down .2% as opposed to the dart board pre-guess of -.5%, data continues to be pretty tough.

 

CPI yoy came in at 3.6%. The Fed wanted some inflation and they got some. But the Empire manufacturing index came in well below estimates continuing the trend.

 

So the Fed seems to be stuck, a bit. Looks to me like they have to "tame" inflation" (even though it is only "transitory") before embarking on any new adventures.

 

Otherwise, if they came out with QE3 next week, oil would imediately go to $150 bucks and the manufacturing index within a few months would go from a putrid -13 to a depressionary -50. And a few months after that when wheat goes to $20 bucks a bushel the rest of the world that isn't having a revolution would join in. Which is bad for business.

 

Between a rock and a hard place, guessing they go for the hard place which is break the risk trade in commodities.

 

fwiw, h

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jrsiajdranch
Veteran Advisor

Re: wave count

MOrnin Noxie we got a heck of a light show with 2.5 inches last night. Blew out the router on my computer just got that back going this morning. I figure that QE3 isn;t happening now so this morning I went to the elevator and forward contracted 3000 bu. of corn for OCT. delivery.  I figure it will be 2 dollars less than the price I got by then.  That 6000 dollars to me is all good!

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NCcorntrader
Senior Contributor

Re: wave count

i agree QE3 would be a colossal disaster, for the same reasons you mention- "bad for business"

 

that we are coming into an election year doesnt help things. BHO will be getting desperate soon.

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