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Current Markets Metals Trading Strategies

Copper Points to Slowing Economy

Andy WaldockComment on Copper Points to Slowing Economy

Copper is often referred to as, “the economist of the metals markets.” This is because of its use in all things that make the economy go round from electronics to commercial and residential construction and general infrastructure. When economic development is robust, copper prices follow suit. More importantly, because copper is a base ingredient in this mix, the price of copper typically precedes any moves in the general economy. Based on the current conditions of the copper market, we expect prices to fall and with it, overall economic activity in general.
The Federal …

Grain Markets Macro Economics Macro Viewpoints Meats

Profitability vs. Responsibility in the Cattle Market

Andy WaldockComment on Profitability vs. Responsibility in the Cattle Market

We’ve discussed at length the balance between feeding a growing population in a world of declining resources. These discussions have been primarily focused on the grain markets and the enhanced yields of genetically modified organisms (GMO) versus any applicable health and environmental risks. This week, we’ll focus on a major development within the cattle industry as it tries to balance concern for public and animal well being against the dual mandate of feeding the world while generating some profit.
Tyson Foods unexpectedly announced that they were going to stop buying cattle from feedlots …

COT Signals Current Markets Trading Strategies

Natural Gas Finding Support

Andy WaldockComment on Natural Gas Finding Support

Natural gas prices have fallen by 25% since its April high, which in and of itself is not a big surprise. Natural gas is notoriously volatile to the point that the market doubling or, halving in price is a common occurrence nearly every calendar year. What interests us is that the current low happens to come near the typical late August seasonal low and also coincides with solid technical support as well as significant buying by commercial traders. Let’s see if we can build a case for a natural gas bottom that may hold through the seasonal low …

Current Markets Trading Strategies

Calling a Top in the Equity Markets

Andy WaldockComment on Calling a Top in the Equity Markets

Back in the old days when the trading pits were full of people executing trades we had a saying, “The market always finds the orders.” This is quantified by the market through the comparison of volume and open interest levels against the price levels that generated the activity. The first rule of trend trading is that growing volume and open interest supports the market’s current direction.
Last week we discussed the idea that the stock market may be establishing a late summer high with probable declines into fall from a big picture outlook. This week, we get technical. …

Current Markets Macro Viewpoints

What’s Wrong with Equities

Andy WaldockComment on What’s Wrong with Equities

The economic black hole between the equity markets and the man on the street has never been greater. Earlier this month the media trumpeted about the all time highs in the Dow Jones Industrial Average. The President commends Congress for creating policies that “put Americans back to work,” and points to unemployment levels that are 25% below their 2009 peak. Meanwhile NBC News publishes the results of a new study, which states that four out of five of us will, “struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives.” Please bear with …

Current Markets Grain Markets

Finding a Bottom in the Corn Market

Andy WaldockComment on Finding a Bottom in the Corn Market

The 2013 United States’ corn crop started off with predictions of being the largest ever. This was primarily due to the USDA acreage report issued on June 28th that showed 97.4 million acres planted
for corn. This was the highest acreage allotted to corn since 1936 and also marked the fifth consecutive year of acreage gains for corn. This caused December corn futures (this year’s crop) to fall
9% in the next few trading sessions. Even though the market is now trading even lower than it was then, I think there are signs pointing to a bottom in …

Current Markets Trading Strategies

Waning Demand in Orange Juice Futures

Andy WaldockComment on Waning Demand in Orange Juice Futures

The orange juice market has rallied by more than 16% since June 25th and is now trading near $1.45 per pound. This marks nearly a complete recovery in prices from the sell off that was triggered by the late June, Department of Agriculture’s Cold Storage Report, which showed a 2% increase in inventories. Much of the rally that had led to the $1.55 high in May was due to speculative buying based on reports of, “citrus greening.” Citrus greening has been found in all of Florida’s main growing …

Current Markets Trading Strategies

The Rise in Crude is Temporary

Andy WaldockComment on The Rise in Crude is Temporary

The price of crude oil has risen by more than 13% in the last two weeks. The price has been driven up by a perfect storm of temporary factors including seasonal, environmental and political issues.
We believe these will subside and return us to a fundamentally over supplied market causing it to fall back below the magic $100 per barrel mark.
Crude oil futures traded under $93 per barrel as recently as June 24th. This is also the day that flooding concerns began creeping into the news from Alberta, Canada, the largest exporter to …

Current Markets Gold and Silver Metals

Measuring the Metal Markets

Andy WaldockComment on Measuring the Metal Markets

The recent sell off in the metal markets has broken the sideways trading range they’ve been in for more than a year. We’ll begin by briefly recapping their recent history back to the 2011 high water marks. Copper was the first market to peak. An expanding Chinese economy and a low interest rate environment drove this market.
“mso-spacerun: yes”> This led to large end line consumers purchasing forward contracts to meet future demand. Finally, copper peaked at $4.65 per pound in February of 2011. The silver
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Currencies Current Markets Trading Strategies

Supporting the Australian Dollar

Andy WaldockComment on Supporting the Australian Dollar

The Australian Dollar has fallen around 11% over the last month. This is a very large and very rapid move for the currency of a major nation. How would you like to end up with 11% less in next week’s check? This is similar to what the average Australian will feel with every purchase of every imported good or service, just think of it as $4.50 gasoline and you’ll get an idea for the feel of it.
Our outlook suggests that the change in the macro is correct but its initial impact has been over cooked.
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