Current Commodity Futures Positions - 8/17/08

Ahhhhhhhhhhhhhhhhhhhhh, relief at last - that's me, pissing away the last of my 2008 gains. Glad we got that out of the way.

Tuesday I was feeling really smart, and bought a mini-silver contract at the bargain price of $15. Unfortunately nobody told me that the bargains were going to get even better! I sold silver on Friday for just over $13.

Hey, I got exactly what I deserved. Look at this chart of gold and silver, courtesy of Agora Financial:


What kind of idiot would try to time the bottom of that spike through the basement floor? (Pointing both thumbs at my chest...) "This guyyyyyy."

On Friday, I jumped into a vat of rough rice and holy water, and repented for my trading sins. Last time I fully repented was last November, when I developed a new trading outlook. That outlook served me very well until I decided I smarter than it.

Well, here's to new beginnings. As I repeat the mantra I should never have forgotten "The trend is my friend, the trend is my friend, don't eat yellow snow, the trend is my friend..."

Open Positions

Date	Position	Qty	Month/Yr	Contract	Entry Price	Last Price	Profit/Loss
08/12/08	Short	1	SEP 08	British Pound	1.9042	1.8620	$2,637.50
08/15/08	Short	1	DEC 08	Cocoa	2589	2587	$20.00
08/14/08	Short	1	NOV 08	Mini Soybeans	1260	1221	$390.00
Net Profit/Loss On Open Positions:							$3,047.50

Account Balances
Current Cash Balance	$56,272.41
Open Trade Equity	$3,047.50
Total Equity	$59,319.91
Long Option Value	$0.00
Short Option Value	$0.00
Net Liquidating Value	$59,319.91

Cashed out: $18,000.00
Total value: $77,319.91

Weekly return: -8.0%
YTD return: 1.2%

***BTW, I usually "cash out" money just to pay for taxes, rent, and cheap beer. So total value is all pre-tax.

Silver Smash Commentary by Analyst Ted Butler

A very well written piece by Ted Butler regarding the recent demolition of silver.

Ted make a very compelling case that the margin of safety at current prices is significant, as he believes the current price is below the cost of production.

I'm very tempted to buy now, but I hate the thought of buying something that is hitting yearly lows. On the sidelines for right now, but watching with great interest.

Current Commodity Futures Positions - 8/10/08

Took some more cash out this week to pay a credit card, and also pump some more cash into our startup.

Well, my hopes/dreams for '08 being a banner year I think are officially in the tank. Earlier in the year, I was hoping I could keep running up the account, and essentially use it as an ATM to fund my life and startup simultaneously.

Alas, it wasn't to be - really it's turning out to be a bummer year for agriculture. What started off so strong has essentially retraced all the way back (pull up the charts for soybeans, corn, cotton, etc - we haven't moved much). Tough to make money long commodities when they are not going up.

From here on in, I'm looking at doing some more trading in pairs, a la Dennis Gartman. My first try at this is my Long Cotton/Short Soybeans trade, and I must tip my cap to Bud Conrad of Casey Research for his astute short soybeans call in a recent publication. I was already long cotton, but would not have thought to short beans had it not been for an outstanding research piece by him.

Last week was a terrible time to be long any currency other than the US dollar, as the dead cat bounce is in full swing. Have to admit even though we've discussed it here that the dollar was due for a bounce, the magnitude and strength of it has really surprised me.

I'm considering adding a short British Pound position to compliment my (underwater) long Swiss Franc position. The UK economy is in trouble, and the BP could be in a race with the US dollar to the cellar - at least that pair would help hedge from further dollar rallies.

Overall a great entry point for the Swiss Franc and many of the Asian currencies here, I think. The dollar has further to drop, no doubt, but it will be a race to the cellar with many of the other currencies. I don't see the Euro, British Pound, or Canadian dollar climbing much more vs. the US dollar.

Also a great entry point for soft commodities - most notably sugar, coffee, and cotton. This trio is still trading at very depressed prices.

Open Positions

Date Position Qty Month/Yr Contract Entry Price Last Price Profit/Loss 06/17/08 Long 1 DEC 08 Cotton 82.20 69.05 ($6,575.00) 08/05/08 Short 1 MAR 09 Soybeans 1303 3/4 1220 $4,187.50 07/29/08 Long 1 OCT 08 Sugar #11 12.84 13.46 $694.40 07/31/08 Long 1 OCT 08 Sugar #11 13.91 13.46 ($504.00) 07/31/08 Long 1 SEP 08 Swiss Franc 0.954900 0.9219 ($4,125.00) Net Profit/Loss On Open Positions: ($6,322.10)

Account Balances
Current Cash Balance	$70,774.87
Open Trade Equity	($6,322.10)
Total Equity	$64,452.77
Long Option Value	$0.00
Short Option Value	$0.00
Net Liquidating Value	$64,452.77

Cashed out: $18,000.00
Total value: $82,452.77

Weekly return: -9.3%
YTD return: 8.3%

***BTW, I usually "cash out" money just to pay for taxes, rent, and cheap beer. So total value is all pre-tax.

No More Cheap Money for Municipal Borrowers

Bloomberg reports that the era of cheap money for municipal borrowers is over, citing the Bay Area Toll Authority's recent of auction of bonds at rates as high as 5.33%.

How long before the era of cheap money is over for everyone?

If you believe it's not long, I suggest you unload your US Treasuries and bonds, or better yet, unload them and go short. Rising rates are going to cream bond prices.

Dennis Gartman Video: Oil Prices Could Drop Below $80

Full video of Dennis Gartman on CNBC

• Thinks oil will drop to $80-90 range
• He's not crazy enough to try and short the market
• Believes oil's bull run will be on ice for the next couple of years
• Is short Toyota and long Harley Davidson - believes people will downsize their transportation (not sure if I follow that theme)