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Tony Daltorio submits:Great Expectations is the title of a classic novel written by Charles Dickens in 1861. It is regarded as perhaps one of his greatest novels. The title “Great Expectations” can also be applied to President-Elect Barack Obama, our soon-to-be 44th President. President-Elect Obama will be expected to cure our country's economic ills and quickly. I believe that the nearly 1,000 point stock market sell-off this past Wednesday and Thursday was due to Wall Street 'disappointment'. The cry-babies on Wall Street were disappointed that President-Elect Obama did not hit the ground running and immediately appoint the future Treasury secretary. Complete Story »
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Trader Mark submits:Ok, I'll have to take "discredit" for some predictions such as the continuing glory days for U.S. farmers. It looks like times are even becoming tough(er) down on the farm; although I suppose it is all relative. Many are coming off historic boom times and cash flush, so a slowdown from that level would still be positive versus where many in other industries are coming from.
However, there are still some interesting comments in here that overlay our comments from the previous year - namely the global competition for resources. Thus far, fertilizer prices (more so) and equipment prices (less so) have not fallen much as farmers worldwide are competing for the same pool of resources. Maybe this will change but it seems hard to believe that as global population grows people will cut back on food in aggregate. Complete Story »
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 Hickey and Walters (Bespoke) submit:
Below we highlight our trading range charts of ten major commodities. The green shading in the charts represents between 2 standard deviations above and below the commodity's 50-day moving average. Moves above or below the green area are considered extremely overbought and oversold. After experiencing serious declines for the past two months, some commodities have bounced back nicely over the last week, while others haven't seen much of a pop. After trading more than 2 standard deviations below its 50-day, oil has staged a double-digit rally, and is on the verge of breaking its downtrend if it closes above $108 today. Natural gas, on the other hand, hasn't rallied at all, but it has stopped going down at least. Complete Story »
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The Sovereign Society submits:By Eric Roseman Commodities, especially oil and gold, are in a correction. But make no mistake: We’re NOT at the cusp of a bear market. On the contrary, smart investors should take advantage of currently depressed prices to aggressively accumulate shares in select precious metals and energy companies. Complete Story »
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Hickey and Walters (Bespoke) submit:
Below we provide our trading range charts of ten major commodities. The green shading represents two standard deviations above and below the commodity's 50-day moving average, and moves above and below indicate extreme overbought and oversold levels. It's no news that commodities have suffered major pullbacks over the last two months, and the charts below provide a good view on how bad it has been. After trading at the top of its range for what seemed like forever, oil finally traded to the bottom of its range late last week, and after touching extreme oversold territory, it finally bounced for a couple of days, only to see big declines again on Friday. Like most other commodities, natural gas unfortunately hasn't gotten a bounce. Since touching 13.58 in early July, nat gas is down 42%. Complete Story »
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 Richard Shaw (QVM Group) submits: Commodity and energy funds of all sorts have proliferated in this recent commodity cycle. There are so many and they are so diverse, it is difficult to keep them all in mind. We put together this table of a variety of broad and narrow focus commodity and energy funds (and related funds) to provide some perspective. Complete Story »
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Frank Holmes submits:Faced with slowing global growth, macro investors began dumping commodities and commodity-related stocks, with small- and mid-cap stocks hurt the most. This commodities sell-off, which began in July and has continued into August, also corresponds to the long-term seasonal cycle in which prices for many commodities tend to bottom out in late summer before rebounding in the fall. The unwinding of the long energy/short financials trade also has been a big driver of recent share price performance. The combination of rules to eliminate naked short selling on financial stocks, a backlash against higher commodity prices and potential government intervention aimed at speculators in the futures market, along with calls for pension funds to divest their commodity holdings, all converged in mid-July. Complete Story »
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The Sovereign Society submits:By Eric Roseman As I said yesterday, the commodity bull market isn't over...not by a long shot. Even with the higher dollar and the temporary correction in oil prices, it's still a mistake to think we're on the cusp of a commodity bear market. Complete Story »
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Michael Ferrari submits:Last week’s lower max temperatures combined with cooler evening temperatures resulted in a light week for US cooling demand. The US population weighted number for the week ending 16 Aug was 54 CDDs, which is -15 vs. normal and -33 vs. last year (same week). More important than the overall US number is the regional breakdown; the weekly CDDs vs. normal were -21 for New England, -29 for the Mid-Atlantic, -35 for the East/North-Central states and -24 for the West/North-Central States (-9, -28, -53 and -59 vs. LY, respectively). Complete Story »
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The Sovereign Society submits:By Eric Roseman Every single day, the world's population uses more oil than the planet can possibly produce. This means the peak oil theory is still alive and well. Complete Story »
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Michael Ferrari submits:A combination of cooler weather in the central and eastern combined with weaker fundamentals including overall demand destruction continue to exert downward pressure on energy prices last week (September Crude/NG), and this bearish market sentiment carried over into Monday and Tuesday’s trading on NYMEX, before the inventory report moved the market back up a bit on Wednesday. Per last week’s weekly discussion, most of the heat was restricted to the west/southwest states, and population centers from the midwest through the east were spared any weather that would have caused CDDs to spike. Complete Story »
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Frank J. Maura submits:Since the hedge funds dropped commodities in early July, you have seen a dramatic sell-off in oil, coal, and fertilizers. This despite the fact that these commodities have excellent fundamentals going forward, stellar earnings, and continued demand. The recent "rally" on Wall Street, with the illusion that with lower oil everything is right with the world, came to a reality check Tuesday when JPMorgan (JPM) reported a loss of 1.5 billion. What the market fails to accept is that the financial crisis is still in the middle innings and as long as the credit crunch, credit card defaults, mortgage crisis, and lower consumer spending continues, this crisis will not go away simply because oil is down in price. Complete Story »
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Arie Goren submits:The dramatic price decline of most commodities at the last five weeks brought some analysts to call for the end of the bull market in commodities, their conclusion is that commodities have reached a turning point and a bigger price decline awaits us. Are they right? Let's see what commodities have done this year. At the table below the main commodities are arranged by their group and last price, the price at the end of year 2007 and the maximum price of each commodity in the year 2008 are given. In addition, the price change from 2008 maximum value and the price change from the beginning of the year were calculated. Complete Story »
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Michael Ferrari submits:This week’s pattern across many of the primary US demand centers is moderately bearish, as most of the heat will be restricted to the Southern Plains and the southwest. Evening temperatures in eastern cities have been pleasant, reducing nighttime cooling requirements across demand centers from Boston through Washington DC. As the ridge in the southwest retrogresses to the west, the center of warmer air will shift to the western US into next week. This weakening ridge will also allow for more moisture to move into the southern plains and parts of the southeast, as Tropical Storm Edouard (currently making landfall) brings strong winds and a lot of rain to eastern TX and LA. Complete Story »
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Matthew Bradbard submits: Commodity investors were probably just as happy to see July end as equity investors were to see the end of June. During the month, the CRB Commodities Index recorded a decline of 10.0%, which is the worst monthly decline since March 1980 (10.5%) and the second worst ever. The commodity markets have produced some sharp sell offs, and given all the attention that commodities have drawn over the last several months, it is not surprising to see a steep correction. Traders that have been riding the bull for the last 8 years may have given back some profits, but recent late comers to the commodity bull run may have gotten stung the worst. Anyone new to commodities needs to be prepared for the large swings, we would advise using a broker for help with entry and exit and to advise on risk management. Because of the leverage, large monetary swings can happen in a relatively short time frame. This does not mean the move higher is over for good, it simply means this correction can be quite deep before the trend reverses back higher once again. EnergiesAfter 2 weeks of oil moving lower, we managed to stay positive last week with September gaining $1.69 closing above the 100 day moving average. For now prices should be supported between $120/122 with the stochastic and MACD indicating an oversold condition, the downward momentum appears to be exhausted. It appears the psychology has shifted and instead of dips being bought rallies are being sold. Needless to say, on a bounce higher resistance comes in at $128.75 followed by $131.75. Prices may continue to move lower but not at such a feverish pace; a sharp decline in demand, growing gasoline stocks, rising inflation in Asia, and easing worries about Iran have all contributed. The immediate direction could be determined by what comes out of Iran and the status of their nuclear program. Complete Story »
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