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Macro Viewpoints

Feel Good Politics

Andy WaldockComment on Feel Good Politics

“The government faces some very tough decisions in the months ahead. The very real concerns over the growth of our own debt must be balanced against the need to nurse the recovery along. Washington
deserves to hear our voices as we express our own opinions on the amount of debt we’re willing to carry versus the benefit we’ll receive from its creation. The most important thing is that we force
them to recognize the very real issues at hand and not allow them to sit by idly as our economy pushes towards our own unsustainable European outcome.”
…

Currencies Macro Economics

Jumpstarting the Japanese Economy

Andy WaldockComment on Jumpstarting the Japanese Economy

The Japanese economy has languished in a deflationary environment for years. The recent Parliamentary elections have ushered in the potential for major shifts in policy, both ideologically and practically speaking. The election of Shinzo Abe as the new Prime Minister and overwhelming support for his Liberal Democratic Party will allow the new regime to control both the upper and lower houses. Therefore, no bargains or watered down policy will need to be struck. The sweeping results are a clear statement by the Japanese people that they expect action …

Current Markets Metals Trading Strategies

Commercial Traders Cap Copper

Andy WaldockComment on Commercial Traders Cap Copper

Copper is frequently referred to as the economist of the metal markets. This is because copper is used in nearly everything that’s made. If it’s not in the final product, it’s certainly in the
production facilities and the machines used to make it. Therefore, one assumes that the more copper a business or country buys, the more production they see in their near future. This is part of the
reason copper has such a high correlation with rising stock markets. In fact, the correlation relationship between the copper market and the S&P 500   hasn’t been negative since the …

Current Markets Meats Trading Strategies

Hog Futures About Face

Andy WaldockComment on Hog Futures About Face

Trading is always a measured risk and best guess scenario. We use the tools and information we have access to in an attempt to predict future market direction and magnitude. This must be balanced
against the risk and then the odds, along with the risk and reward scenario must be calculated to determine if the trade is worth taking. Every once in a great while multiple forces align themselves
and make the task of calculating variables much easier. This is the current situation in the lean hog futures where fundamental, technical and seasonal factors have all combined to …

Current Markets Trading Strategies

Finding a Bottom in the Coffee Market

Andy WaldockComment on Finding a Bottom in the Coffee Market

The coffee market is what you’d call a professional traders market. It is a large and volatile contract, which leads to equity swings that are too large, even with a single contract for small traders
to withstand. Furthermore, commercial traders dominate the market through their access to global information and deep pockets. The coffee futures market has been in decline since May of last year,
losing half its value from the $3.08 per pound high. Even with the decline in volatility as the market has collapsed the average daily range over the last month is still nearly $.04 …

COT Signals Current Markets Trading Strategies

The Stock Market Bounce is for Real

Andy WaldockComment on The Stock Market Bounce is for Real

 
 

We published a sell signal for the S&P 500 in our October 4th article, “Who is Pushing the Stock Market.” Several fundamental and technical reasons were laid out.
The fact that that the market topped out the very next day and sold off by 9% in the last month leads me to believe that this decline may have run its course. The easy money on the sell side has been
made and perhaps, we should start looking at the buy side of the market. …

Macro Viewpoints

Tax Hikes We’ll All Feel

Andy WaldockComment on Tax Hikes We’ll All Feel

The election is over, the dust is settling and the economic landscape is coming into focus. The fiscal cliff and the Federal debt ceiling dominate the immediate foreground. Both of these issues come
down to the business practices of revenues and expenditures. However, since this is the government and not a business it will be subjected to gamesmanship and hyperbole as both political parties spin
their solutions in an attempt to come out, “a winner.” Unfortunately, the reality is that regardless of the spin, you and I will end up paying more for the year that’s already past …

Current Markets Trading Strategies

Winter Wheat Drought

Andy WaldockComment on Winter Wheat Drought

The summer is over but drought fears continue to haunt the grain markets. The rain we never received this summer has turned into snow that we hope is coming. The corn and beans have long since been
harvested but the U.S. winter wheat crop is the next grain market to be left high and dry while European wheat is left to drown in its own wealth of precipitation.
The USDA Crop Progress Report showed 39% of the U.S. winter wheat crop in good or, excellent condition as of November 4th. Sounds pretty good, right? …

Current Markets Trading Strategies

Sandy’s Effect on the Cattle Market

Andy WaldockComment on Sandy’s Effect on the Cattle Market

Sometimes in this line of work the misery and poor circumstances of others creates profitable trading opportunities for our clients and us. Hurricane Sandy is making life miserable for millions of
people. However, it is also providing us with an opportunistic trade in the cattle market. Millions of houses, stores and restaurants without power means that there will be lots of spoilage.
Replacement of the red meat can only come from existing supply. Therefore, as we mentioned last week, tight current stocks will grow even tighter as the kill rate increases from animals already on
the feedlots …

Macro Economics Macro Viewpoints

No Bull in the Cattle Market

Andy WaldockComment on No Bull in the Cattle Market

Cattle stocks and beef production in the U.S. have been declining since 2002 and beginning stocks have dropped more than 5% in the last five years. This summer’s drought also led to massive
slaughters as farmers couldn’t efficiently feed the animals to hold them back for a later date. The declining cattle stocks across North America will take time to rebuild. Our thoughts have been
placed on the buy side of the cattle market as it tightened up and we expected the cattle market to rally sharply in 2012. However, there have been major changes within the global …