Tradeable Data

This blog is published by Andy Waldock. Andy Waldock is a trader, analyst,commodity broker and asset manager. Therefore, Andy Waldock may have positions for himself,his family, or, his clients in any market discussed. The blog is meant for edu-cational purposes and to develop a dialogue among those with an interest in the commodity markets. The commodity markets employ a high degree of leverage and maynot be suitable for all investors. There is substantial risk in investing in futures.The talking heads on the financial networks are more interested in arguing andhearing their own voices on tv than they are with examining the data that we at our disposal to make rational decisions. Currently, the debate rages between "double diprecession vs. Dow 10,000," the ever popular "inflation vs. deflation" and finally, "stimulus vs. private growth." These debates do nothing to help individual traders andinvestors find the facts before them based on data that is readily available.In 30 seconds or less,the data tells us that deflation should be our major concern. 1) there is no inflationary pressure in the three keystones of economics. a) land. pick your place and make an offer. b) labor. the unemployment numbers speak for themselves. c) capital. government stimulus and 0% interest is available to anyone who can wade through the paperwork. 2) The stock market has been overinflated by the surviving financial companies that have been allowed to borrow at 0% from the government and lend at whatever rate they can charge. Earnings are on the tail end of the short term tag team spike that has been provided buy government stimulus and cost cutting. 3) The dollar is likely to put in a bottom near these levels. The metals are set to decline. Copper failed to make new highs on this run up, in spite of the Chinese stock piling. Speculative positions in the metal markets are at their peak leaving little money on the sideline. Now, let's put this in tradeable language. 1) The Commitment of Trader Reports show that the Dollar has shown a tremendous build up of commercial net long positions - moving from net short over 30,000 contracts last October to currently, net long 12,000 contracts. The lows around 76 should be defended. 2) Copper's failure to make new highs provides solid resistance $2.85 - $2.95 to sell rallies against. London's stock piles are high and the Chinese stimulus is petering out. 3) Gold has seen a huge build in speculative long positions above $990. The rally to $1025 hasn't left a lot of room to take profits. Under $990 could see substantial stop loss selling by weakly financed speculators.