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March 2015 Editors Comments

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Special Historical Reports

MRCI has begun publishing a new round of volumes in its series of special reports each year.  Hot off the press in early January:

2015 Historical Live Cattle/Feeder Cattle a 148-page volume of seasonal analysis for live cattle and feeder cattle, including seasonal patterns for each delivery month, spreads among them, and feeder/fat spreads; with historical daily charts and also cash and basis charts; 66 seasonal and spread strategies for year-round trading ideas.

2015 Historical Lean Hogs and Hogs/Cattle Spreads:  a 128-page volume of seasonal analysis for lean hogs and for hog/cattle spreads, including seasonal and spread patterns; historical daily
charts; 76 seasonal and spread strategies for year-round trading ideas.

Recently published:

2014 Historical Indices:  a 188-page volume of seasonal analysis on major US stock index futures, including S&P500, SP Midcap 400, NASDAQ, DJIA, Russell 2000 and also for 8 international indices; with 62 US and 112 international seasonal strategies.

Call 1-800-927-7259 or 1-541-933-5340 or else send an e-mail to This e-mail address is being protected from spambots. You need JavaScript enabled to view it to find out more and be among the first to see this new research.

Physical Commodities

Is the cure for low prices still lower prices?

Seriously, folks.  Isn't this commodity liquidation getting a little bit overdone especially given the strong economy driving the stock market?  Is there a disconnect somewhere?

The $CCI (the old Continuous Commodity Index that was the old CRB Index and now found at stockcharts.com) had a high of 569 in April 2014.  At the end of January 2015, it was testing 430 gouging out almost 25% of its value in 9 months.  Some other indices show a loss of 33% in just the last 7 months!

Granted, the US dollar soared.  But Commitments of Traders reports show that commercials hold record short positions in the world's reserve currency and speculators record shorts in euros.  Commercials most typically hold enormous long positions at a bottom and enormous shorts at a top.  Will "this time be different"?

Crude oil collapsed.  Even though some producers may be pumping even harder now to make up for less profit, how many will pump at a loss for how long?

To paraphrase John Maynard Keynes:  Will these commodity markets stay irrational longer than the world can stay solvent?

I don't know, but I for one would be ready to ...

Trade 'em,

Jerry Toepke


Last Updated on Tuesday, 03 February 2015 13:14
 

February 2015 Editor Comments

E-mail Print

Special Historical Reports


MRCI has begun publishing a new round of volumes in its series of special reports each year.  Hot off the press in early January:

2015 Historical Live Cattle/Feeder Cattle: a 148-page volume of seasonal analysis for live cattle and feeder cattle, including seasonal patterns for each delivery month, spreads among them, and feeder/fat spreads; with historical daily charts and also cash and basis charts; 66 seasonal and spread strategies for year-round trading ideas.

2015 Historical Lean Hogs and Hogs/Cattle Spreads: a 128-page volume of seasonal analysis for lean hogs and for hog/cattle spreads, including seasonal and spread patterns; historical daily charts; 76 seasonal and spread strategies for year-round trading ideas.

Call 1-800-927-7259 or 1-541-933-5340 or else send an e-mail to This e-mail address is being protected from spambots. You need JavaScript enabled to view it to find out more and be among the first to see this new research
.

Physical Commodities


2014 ended with a dull thud for nearly all physical commodities, with almost any commodity index ever devised closing the year at its lowest level in more than four years.  Stocks soared, the US dollar soared, and bonds held their own.  Interest rates are negligible, inflation nonexistent.  Everything is beautiful.

Goldilocks, anyone?

What does it all mean?  Will no one ever eat again?  Or, except for cattle and, to a lesser degree, hogs, do we just have too much food?  Will no one need sugar, coffee, cocoa?  Apparently the world is flooded with not only food but also energy.

We are far better off with stocks.  Maybe we cannot eat them or warm ourselves with them, but we can always find a greater fool who will buy them.

Are the central banks of the world idiots for accumulating gold, for wanting to repatriate their own ingots?  Why do they not wisely accumulate shares of Facebook instead?  
Or stuff dollar bills under their mattresses?  Or invest in 30-year bonds paying less than 3% interest?  
Or buy a house with only 3% down?

Who needs commodities?

I don't know, but I for one would be ready to ...

Trade 'em,

Jerry Toepke
Last Updated on Friday, 09 January 2015 13:12
 

January 2015 Editor Comments

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Physical Commodities


First, a couple of housekeeping items.  Read a Fond Farewell to Howe's Limit Rule on 66, where we have for years discussed and published data on limits.  Exchanges have essentially eviscerated
limits.

Secondly, we introduce Brent Crude Oil as a major futures for seasonal analysis.  It is actually the pricing standard used by most of the world, is traded on ICE, and enjoys similar liquidity as crude light.

Did commodities finally hit a major bottom?

The facts, m'am.  Just the facts.  Admittedly on light volume, a decision by OPEC not to cut oil production collapsed many commodities on Friday, November 28.  On November 30, the Swiss rejected a referendum which would have required their national bank to purchase 1500 tons of gold.  More collapse?

No.  On December 1, gold and platinum retested their lows and silver made a new low and all three reversed with huge daily ranges and huge volume.  Crude oil followed through to make a new 5-year
low and reversed to close $3 higher.

Wheat had already been trading with curious strength, and corn and soybeans were trading gentlyhigher since record harvests.  Did commodity indices make at least three- and six-year cycle lows?

I don't know, but be ready to ...


Trade 'em,

Jerry Toepke


Last Updated on Thursday, 04 December 2014 13:22
 

December 2014 Editor Comments

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Physical Commodities


For daily and weekly charts of the old CRB and for the CCI commodity indices, traders can go to the web site stockcharts.com.  Then go to Free Charts and type in either $CRB or else $CCI.

Commodities continued their four-month slide, with each of those indices losing more than 11% since June 30.  The culprits?  First, the US dollar, which gained more than 9% during those four months.  Second, good weather, which helped drive major crops uniformly lower:  soybeans over 9%, corn 11%, wheat nearly 8%.  Third, US shale oil and a Saudi decision to pump more oil combined to help drive crude oil almost 24% lower!

The buzzword now is deflation not disinflation, but outright deflation.  The Fed ended QE and handed to baton to thr Bank of Japan, which announced a huge new effort to stimulate their economy by buying assets and driving the yen lower, and thus the US dollar up.  (Will that work?  Or will Japanese savers see it as a desperation  move and hold even tighter to their yen?)

What now?

Most commodities are, as of October 31, grossly oversold within bear markets.  Thus, without some kind of black swan, one would think the best they could do for now is to mount moderate relief rallies.

No matter what, we must be ready to ...

Trade 'em,

Jerry Toepke
Last Updated on Monday, 03 November 2014 17:16
 

November 2014 Editor Comments

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Physical Commodities


In January 2014, physical commodities personified by the CRB Index
made a small double bottom at 272 (with one in November at 272) which
was also a higher double bottom with an even more significant one
in June 2012 at 267.  The Index then rallied hard into March/April
before struggling to reach 313 in June 2014.

And then the US dollar took off.  The US$ Index found reinforced support
at 79.77 and set off on a so-far 13-week march higher that reached
86.33 on the last day of the third quarter and US fiscal year.  That
8.2% rise in the US$ drove commodities back down into the last full
week of September to below 277 an 11% decline.

Most commentators, many perhaps looking at other commodity indices
composed or weighted differently, saw commodities as being in a new
bear market.

And certainly they were during the third quarter.  Grains and soybeans
fell apart under the weight of not only the dollar but also enormous
crops.  Silver made new lows on the last day of the quarter as crude
oil plunged over $3/bbl.

But, prior to the last day of September, the CRB itself had rallied for several days.

(Find the chart at stockcharts.com.  Go to Free Charts and type in CRB.)

We had better prepare to......

Trade 'em,

Jerry Toepke

Last Updated on Monday, 27 October 2014 16:29
 
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