even the biggest bear knows one of the best buys coming out of this nightmare will be commodities
basic material companies have just been beat 2 hell....UYM has been a good trader 4 me...hard to believe it was 110 once!!
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even the biggest bear knows one of the best buys coming out of this nightmare will be commodities
basic material companies have just been beat 2 hell....UYM has been a good trader 4 me...hard to believe it was 110 once!!
Market timer Charles Nenner (http://charlesnenner.com/) says the bottom in commods is here and now.
I assume this would coincide with a weak dollar? How do you think the S&P would fare if the dollar drops and commods rise?
someone mentioned kol here....
http://www.chicagotribune.com/news/c...0,498031.story
One thing you guys have to remember is there are 80 million barrels of oil sitting in tankers scattered across the world who are going to benefit one way or the other here. These are the big boys, the commercials, the ones in the know.
1. If contango stays in effect (front contract cheaper then back end contracts) they'll just sit and wait to sell as the storage costs outweigh the wait.
2. If oil begins to creep up as speculators (yes speculators, and I believe 100% it was hedge funds that caused the runup in Oil last summer leading to a deeper depression, but that's a whole other post) jump back on board, the boys off the coast will simply deploy a couple thousand barrels to sell for a quick profit. This supply being deployed will drive the price back down.
Therefore, I see the commercials, also known as 'the only ones who should be allowed to play in this market', keeping the price of oil depressed for a few months going forward. The thing to watch out for is demand increasing after this inventory is worked off. In a lot of ways it's like the current economy-too much supply to be worked off keeping prices depressed in the near future.
Sorry for my ignorance, but is Nenner any good? His website doesn't give much more than mainstream TV interviews. No track record, no recommendations or newsletter sample. I saw him once on Bloomberg and he was very calm but firm in his belief.Quote:
Originally Posted by etftalk
Today there was a thought-provoking article about TIPs and DBP. Not sure which thread to put it in, so here it is.
Deflation or Inflation ETFs? Why The Bond and Commodity Markets Are Forward-Looking
By Gary Gordon | February 10, 2009
Everyone points to the November 2008 lows as a critical "bottoming" area for stocks. For the S&P 500 to build a base, it has been said, it must not establish new closing lows below 750.
Keep in mind, though, virtually all assets and sub-classes free-fell in November. Corporate bonds, inflation protected bonds, high-yield bonds, preferrred stock, U.S. common stock, foreign stock, as well as scores of commodities, all hit 52-week lows November 20.
Some of these asset types have continued to fall, setting new lows. Deflation fears and dollar devaluation took the wind out of oil and base metals. Meanwhile, stocks have been in a wide trading range since November, with the S&P moving between 750 and 940. (If you exclude one day, we're really talking about 800 and 940.)
With trillions of taxpayer dollars being spent on stimulus, bailout, confidence restoration and "breaking-the-deflation-death-spiral," are the markets already worried about the repercussions? The rise in precious metals and treasury-inflation protected securities suggests that the markets might be thinking way ahead.
Consider the once-boring area of the iShares Treasury Inflation Protected TIPS (NYSE: TIP). It seemed pretty hard to get excited about a 2% or 3% yield when things were moving along smoothly... inflation be damned.
Then the commodity bubble burst, followed by the credit calamity. Deflationary pressures sent TIP form 110 to 90 in a matter of months. Nevertheless, in a few more months, the iShares Treasury Inflation Protected TIPS (NYSE: TIP) was back above 100.
Perhaps the yield itself was enough to get buyers interested. It's as high as 6.25% today... pretty hard to beat for income investors.
Yet there's little reason to doubt that 0% overnight lending rates and the massive amounts of Fed liquidity injections aren't persuading some people to use TIP as an investment in the future; that is, palpable inflation may just be a matter of time.
In addition to a desirable 6.25% yield right now, there's another sign of strong demand for the iShares Treasury Inflation Protected TIPS (NYSE: TIP). It's one of a select group of ETFs that currently push the 200-day moving average AND have risen close to 10% in 10 weeks.
There are those that gold and silver also protect against inflation. If the markets were living in the present, rather than acting in a forward-looking manner, one might expect to see the Powershares Precious Metals Fund (NYSE: DBP) struggling alongside equities.
Instead, the historical inflation-fighting metals have accomplished what few ETFs have done since the November lows; specifically, DBP has pushed above a long-term trendline of 200 days AND racked up more than 10% gains... much like TIP.
Sure, we can talk about fear of currency failure favoring precious metals. Or we can point to an outstanding 6.25% yield as sparking interest in inflation-protected treasuries. Nevertheless, I am equally inclined to believe that these trends are a result of forward-looking plays on the eventual return of inflation.
http://www.greenfaucet.com/etfs/defl...-looking/96965
Lady
Apparently he has a pretty good following from big firms (used to work for Goldman). When asked how often his models were right, he responded in an as a matter of fact manner something like, "it's always right".Quote:
Originally Posted by Bullitt
Then asked, then why don't you own the world? He said he is not an American, that he justs needs to eat, not get rich. Kind of a jab at our capitalisim.
I always wonder about those guys who produce the 'underground' market timing strategies. Maybe they do hold the holy grail and want to keep it to themselves because once they start to sell it, it runs the risk of being factored into the market. Yeah I remember him being very confident in his models.
Commodities have already turned. Take a look at OIH and the relative strength it's been producing. Logic would say USO should turn soon also, but right now UGA is trending steady above it's 50 DMA. Maybe a good entry into UGA would be a pullback on it's 50 DMA. As long as XOM stays above 74 and CVX stays aove 67.50, OIH should continue to outperform.
You have to figure, there are millions of barrels of oil in these offshore tankers ready to flood the market on any uptick and as long as contango stays in effect, these tankers can slowly hit the oil market with a supply on the sell side. Gasoline can only be produced at a constant rate due to the restriction on refineries in the US. Most refineries and oil platforms that got wasted in Katrina are back online by now, but our refineries still can't keep up with demand.
So, while USO tends to get the most press and has a higher volume than UGA, it may be more worthwhile to trade (or hop on a trend trade) with UGA than USO.
Any thoughts?
UGA is a player IMO, I just like the more volatile stuff.:bigsmile:
UGA looks interesting. It appears primed for a pullback if you look at the exponential moving averages, and the PMO (momentum indicator), but the simple moving averages are showing good technical setup.
It's trading above both the 20 and 50 DMA (simple) and the 20 DMA is above the 50 DMA.
It trades below the 50-day EMA and the 20-day EMA is below the 50-day EMA.
http://www.etftalk.com/images/forum/uga.gif
Follow up on Charles Nenner prediction. On Feb 3 he said, the long-term market cycle will be "bottoming in a couple of weeks", and rally into mid-March (March 9 to be exact).Quote:
Originally Posted by Bullitt
His short-term cycle suggested the market would bottom in a couple of days [from Feb 3], which did not happen. Here it is Feb 20. His credibility is on the line if we don't see something soon...
http://charlesnenner.com/inc_files/2009-02-03-cn-cnbc.wmv
Hi Bullitt, I told Lady the other day I've been looking hard at USO. Trying to winnow down ETF choices for a very small trading account like mine is tough so I'm being pretty conservative. Expense ratios count for me. USO exp. ratio is 0.5% vs. UGA exp. ratio of 0.6%.Quote:
Originally Posted by Bullitt
USO is also trading at a better discount than UGA is for the moment. Discount status and level are one of my selection criteria too.
Another criterion for me is average daily trading value. SeekingAlpha had an article in early January when they listed 139 ETFs due to die, older than 6 months in existance, with average daily trading value of <$100,000-with more ETFs due to die shortly. Maybe UGA doesn't fit that category, I don't know, but when I look at daily shares traded, there's a big fat No Data sitting there-info from etfconnect. Red Flag for me. As Malyla says "watch your tail". JMO, I'm considering putting my first ever toe in the ETF pool next week with USO.
http://www.etfconnect.com/select/fun...sp?MFID=184932
Good for you alevin and good luck! An ETF virgin... no longer. :DQuote:
Originally Posted by alevin
I'll be watching USO myself, it might make for a good trade, if I can time it right. :rolleyes:
Uhh, being detail-oriented as I am, I've continued to research my oil ETF ideas through the weekend. I've got seriously contradictory information in my head right now, which means I'm gonna hold off on USO until things get a little clearer. And of course that means I'm thinking stronger possibility things will get a bit more bearish than bullish in the near-term. I'll expound on those bits of info over on the Everything Oil thread I just found this morning. Drat, still an ETFV. :toung:
ETFV - love it :)
I wouldn't worry too much about expense ratios unless you plan on buy and hold. (Not a good idea with a commodity ETF). Discount status is a tough one on ETF's because of institutional arbitrage. There are firms who figure the exact price of an ETF and trade it based only off the the discrepancies in NAV. I'd just be weary of an ETF trading at a significant premium to NAV, such as anything over 1%.Quote:
Originally Posted by alevin
There's pros and cons to low volume, and I'm sure you know the cons already. However, we're small fries and probably aren't buying much more than 100 per order anyway. Sometimes we might be buying 50 shares of an ETF because of course, we never buy all at once. (I wish I could take my own advice sometimes.) I've put in orders especially on days the market has been hammered, that got filled at a better price than my limit because it was a low volume ETF and other folks were most likely panicked out. You can't get away with that in USO.
UGA may be turning though and UGA won't be able to continue rising without USO pulling up behind it.
Follow up on Nenner's prediction.Quote:
Originally Posted by etftalk
He did say the S&P 500 could hit 1000 on this rally, which was close. But he also said the rally would start in Mid_february and END on March 9th. It was just getting started on Match 9.
He claimed victory the other day on CNBC, despite being way off with the timing.
http://www.cnbc.com/id/15840232?video=1155616343&play=1
That's one of the reasons I don't try to frontrun things, better to be a trend follower/momentum player-end up looking silly for getting caught flatfooted out of the market on the 90% updays instead.:rolleyes:
That's one of the reasons I don't try to frontrun things, better to be a trend follower/momentum player-end up looking silly for getting caught flatfooted out of the market on the 90% updays instead. :rolleyes:
I haven't forgotten about UGA, but been watching for a few months now.
UGA, pivot point around 35.77 off a 4 week base. Base isn't tight enough to qualify as a cup and handle, but volume has dried up in textbook fashion during the basing period. Support at 10 WMA, watching for a break of 35.77-36 on volume.
Might be worth another shot when oil makes another run at a higher high.
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Nenner was on Bloomberg radio two weeks ago. He basically said opportunities are very limited at this point on the buy side. Hey I was thinking. The title of this thread will soon be asking when will commodities turn down?
Interview with Charles Nenner on HedgeFundRadio. Scroll to the bottom of this link.
http://www.madhedgefundtrader.com/Hedge_Fund_Radio.html
Always entertaining, that Nenner.
I listened without taking notes so I may have to relisten to confirm, but it sounds like he says:
- Stocks will peak after 1st week in Jan 2010.
- Nat Gas's recent run will peak at the end of December
- The dollar will peak in Feb 2010
- Commodities look better in 2010, as does the euro & yen.
- Interestingly, gold will also peak with the dollar ($1240 or in Feb), which doesn't sound right.
I wasn't too impressed with his call last spring.
Additional thoughts from Nenner. Basically a recap of his major themes. Great call on Gold.
http://blogs.forbes.com/streettalk/2...ls-market-top/Quote:
At the Friday close, technical analyst to the hedge fund stars, Charles Nenner, put out his long awaited sell signal on the S&P 500, with the market’s definitive break of the crucial 1,125 support level. From here you sell into the rallies.
Thanks! I thought Nenner sold in October? Maybe he did, but he's now making it official for his clients. I guess if I just read it I might find the answer. :)