Page 1 of 3 123 LastLast
Results 1 to 10 of 26

Thread: when will commodities turn?

  1. #1

    Join Date
    Jan 2009
    Posts
    77

    Default when will commodities turn?

    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!!


  2.  
  3. #2

    Join Date
    Dec 2007
    Posts
    906

    Default Re: when will commodities turn?

    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?
    -- Tom | My Trades

  4.  
  5. #3

    Join Date
    Jan 2009
    Posts
    77

    Default Re: when will commodities turn?


  6.  
  7. #4

    Join Date
    Jan 2009
    Location
    Upstate NY
    Posts
    142

    Default Re: when will commodities turn?

    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.
    "Don't let your highs get too high and don't let your lows get too low." Bullitt’s Market Blog

  8.  
  9. #5

    Join Date
    Jan 2009
    Location
    Upstate NY
    Posts
    142

    Default Re: when will commodities turn?

    Quote Originally Posted by etftalk View Post
    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?
    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.
    "Don't let your highs get too high and don't let your lows get too low." Bullitt’s Market Blog

  10.  
  11. #6

    Join Date
    Feb 2009
    Posts
    654

    Default Why Bond and Commodity Markets are Forward-Looking

    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
    If you think education is expensive, try ignorance. - Derek Bok

  12.  
  13. #7

    Join Date
    Dec 2007
    Posts
    906

    Default Re: when will commodities turn?

    Quote Originally Posted by Bullitt View Post
    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.
    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".

    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.
    -- Tom | My Trades

  14.  
  15. #8

    Join Date
    Jan 2009
    Location
    Upstate NY
    Posts
    142

    Default Re: when will commodities turn?

    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.
    "Don't let your highs get too high and don't let your lows get too low." Bullitt’s Market Blog

  16.  
  17. #9

    Join Date
    Jan 2009
    Location
    Upstate NY
    Posts
    142

    Default Re: when will commodities turn?

    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?
    "Don't let your highs get too high and don't let your lows get too low." Bullitt’s Market Blog


  18.  
  19. #10

    Join Date
    Jan 2009
    Posts
    84

    Default Re: when will commodities turn?

    UGA is a player IMO, I just like the more volatile stuff.

  20.  

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •