Wednesday, May 21, 2008

Commodity Market Thoughts

  • Cattle's looking good - I'm keeping an eye on the Feeder market also. Wish I still had all my Live Cattle contracts, but oh well - looking to add on a new breakout.

  • Pork bellies are not looking good - same article linked above mentions too much supply on the market.

  • Quite a breakout by gold and silver over the past few days. Silver looks particularly intriguing, as it has a compelling supply/demand story also. I believe both are sitting right around their 50-day moving averages.

  • All the commodity currencies are rallying quite strong. Will be interesting to see if the Aussie dollar can stay strong if the market turns down. I personally think there will be some short term panic selling, which will also drive the Japanese Yen and the Swiss Franc up.

  • Sugar, as our buddy Toby said once, is acting like a giant turd. Too much supply on the market, it appears. Long term it's going much higher - until then, probably best to wait.

  • Coffee is looking strong also. I'm going to sit back and wait on this one - coffee head fakes more often than #24.


JustinC said...

I remember watching a chartist on Bloomberg a month or so ago saying that gold would trade between $800 and $1000 over the summer before breaking out in the autumn. This was as it was falling pretty quickly after the peak. Every call I remember her making has been right so far..

Oil's at another new high, ignoring the fact everyone thought it would trade between $110-130 for a while. Looks like it could be toppy but there's no way you'll catch me going short, not whilst there's 3 billion Asians still getting subsidized fuel.

andaluchi said...


Just started reading your blog and really enjoy it. Thanks for sharing all the great info.

I've been investing in the commodities bull as well, although I've been buying mainly stocks and ETFs. I'd like to get my feet wet with futures.

Any advice regarding the mechanics of opening an account and starting to trade? I've had brokerage accounts for years, but I'm new to futures. I have E*Trade accounts, so I thought I would just go with them for the futures.

Thanks in advance.

SugarHigh said...

Cool thanks man.

You should be fine using E*Trade for your account. Sure, some basic advice I'd give on getting your feet wet trading:

- Go easy on the leverage - extremely easy - until you get a feel for it. Greed can be intoxicating.

- I'm not an expert on technical analysis, but in short: buy what's going up, and sell what's going down. Never add to a losing position.

- Read some good books on the subject.

I highly recommend a book called Winner Take All, written by commodities trader William Gallacher. Also check out Trade Your Way to Financial Freedom, by Van Tharp.

Read these two books and you'll be well on your way.

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