Last week the white house was going to review weather to keep or not keep the eight thousand dollar tax credit for first time home buyers. All of a sudden today the program is to end on December 1st 2009. One of the main reasons for the halt of a program which is responsible for up to 50% of today’s new home buying is because of fraud. It turns out that people have been using their children’s identity info as a means to qualify as a first time home buyer. These are unemployed dirt bag mortgage brokers no doubt. But it doesn’t stop there. Also among the scnadelous which is suprising are IRS employee’s. That’s right, the IRS have had to do tons of internal investigations of it’s own employees new home purchases. So the average first time home buyer gets screwed.
What does this administration think is going to happen to new home sales numbers after this program isn’t available next month? Historically December is the slowest time for new home sales annually so they are probably hoping the numbers will just mix in with the previous years sales figures.
What should be going through your head after reading this is, yes, home prices are about to go lower, which will effect new home construction, which in-turn will send the dow straight down. Short the Dow! Short Caterpillar, Ingersol Rand , Commercial and Residential Construction Sectors. The stock market is going to crash, sorry. So either get out of it, or take advantage of it.
There are several ways to hedge your positions in the market. If you have a good broker, ask him if he knows about delta neutral positions. This is a procedure in which put options on the stock indexes via a commodity broker are put in your account in order to protect you in the event of a fast overnight crash. The premiums of your options will be worth the amount of your market risk putting your account in Neutral. Or if your broker hasn’t taken that class, tell him you need to diversify into a bear market or ultra-bear market fund, again hedging your risk. There are also Exchange Traded Funds, ETF”s but those are for loosers, don’t waste your time.
Tune in next week on the only way to save the U.S. dollar after it has been attacked by the white house.
These articles are not meant to say that I am the almighty! But I will never post tons of charts with twenty too many technical studies on them, or talk about fundamental financial news telling you whats going to happen with Gold and the S&P. I am just a simple commodity broker who is involved in commodity trading.
While I can and probably will show you a simple chart someday there will be a real reason for it. Like, Bonds are going to make a huge shift, and it’s something that you could actually take advantage of. Or Oil is going to be a great short! I love shorting Oil!
I have two reasons in putting time in this. One, to share some experience and tell you that the markets are not that hard to learn. Two, promote a brokerage owned and operated by me. The promoting part is all done via SEO so you wont have to deal with one sided opinions. Use any broker you like. What most traders need to know is that things they hear or read about has nothing to do with the future movement of their stock or commodity. All the movements that you see are based on institutional traders with billions of dollars under management looking at technical indicators. Their buys or sells, are triggering other indicators, seen by other money managers and institutionals who also place huge buys and sells based on that info. If you want a sample of what these professional traders are making their decisions on, I would be happy to email you the information, besides they are all free on the internet, you just need a quick lesson on how to use them.
It seems every time the stock market gains steam, the oil market punishes us at the pump. Remember when Bush fought
so hard to give us stimulus checks, only to have gas go from $2.60 to $4.00. It took a CFTC investigation to shu off the herding hedge funds. Of course then they shorted it all the way down to $36. Now the recent gains in the S&P have put some margin money in the hands of the leverage kings, can anything stop them? Obama wont have a chance unless he steps in to correct it and that’s probably exactly what he’d do. A republican president did the same thing when oil was getting too high in the eighties, he announced that unless the price goes down we will not be buying any oil from the middle east. The next morning the energy market tanked, a statement that these days would have quite the opposite affect.
So here we are again, demand down, production up, PRICE UP? Huh? Huh, is exactly what the finance media outlets should be asking. But instead they interview five different analysts and pick the story that sounds good for the day. Another reason why fundamentals will never work for trading. Why isn’t anyone talking about about this? I feel like I am the Michael Savage of finance.
The nymex is still leanent on their rules if you are considered a bonified hedger alowing the instiutionals to leverage more contracts than everyone else. The large wire houses are also still selling OTC’s as an asset class. With the commodity brokers still playing follow the leader with everyone else we wont be seeing relief at the pump anytime soon.
So the lesson in all this is, GET LONG STUPID. Were only at $72. We’ve been here 3 times before, which should bring us way above $150, closer to $180. At that point maybe Obama will have a cash for fuel burning cars and a credit tword electric hybreds, in-turn bringing back the american car companies. I should work in the white house. Or I could eat rocks. Ya that one!
In 2007 after January 1 through about April, after oil came off it’s $72 highs, no one including myself could find a trend in the markets. It didn’t matter what position you took, you were almost guaranteed to loose. For so long with help form the Index and Hedge Funds, trends and directions were easy to depict. What was it that was tripping up the market? Re-aligning after the new year? Mass exoduses of long and short positions for the upcoming credit crash? What ever it was, I learned a lesson. That lesson is that it is ok to stop trading. It’s better to make 0% for the month than lose 6. I also learned from looking back that no matter how solid my technique, it will not always apply for short periods of time. The worst case scenario is that you have to completely go back to the drawing board. Every great trader should be open to this unless they’re willing to leverage their career off their technical study.
But today thank God the trends are back. You wouldn’t think so but even with the economic turmoil, things are as clear as day. The mass scalping funds are out of the picture exposing the old school hedgers and their directions. A parabolic indicator is as easy as Red Light, Green Light. Bonds. I love trading bonds. I love using bonds as the indicator and then choosing weather to play the 10,5 or 2 year note in the same direction. It should be illegal. I will never subscribe to Breifing.com or give into their fundamental propaganda in which they are bringing in millions in advertising and then delete their free section for investors.
While most commodity brokers are working for independent boiler rooms pitching option spreads to retiree’s, the ones that have technique and know how to bring returns are often left in the dark and struggle with the ethics of prospecting for new equity. When or how are the profitable futures brokers going to be separated from the derelicts of the industry, of which there are thousands. One way, the only way currently is to become a CTA. Only then will you be recognized for your returns. The next problem is finding a way for potential clients to find you. Being listed on sites such as Autumgold.com helps, but what about the people that don’t or would’nt seek to find such resources. The only way is for the futures broker to venture out from behind the screen and network with the financial community. Once you have a successful record and the big firms see it, you wont be able to accomodate the level of equity. This is the only moral route for todays successful commodity broker.
Several Neo Gold Nazzi’s such as Jim Sinclair and other Gloom & Doom so sayers will lead you to believe that every time there is a rally in gold, that “this is the one”. What is the percentage of these metal guru’s have a silent financial stake in bullion companies? Then when the carpet is pulled out from out of the market they scream and blame the “market controllers”. FYI Gold kooks, Nobody cares about these so called precious metals, were in it for the buck and then were going to get out.
Personally I use trailing indicators to indentify when the hedge funds and commodity broker index funds are hearding and drawing the market in one direction. I wait for a slight pullback, and then jump in at the beginning of the next part of the trend and let it ride with my trailing stops. Thats the way I do it, but I’m one of the bad guys, pretty negative too. The funny asians love to reverse their positions and go short in the middle of the night on the night market when all of America is long. I love that.
I don’t care if I’m trading canola oil or treasury futures, or bond futures, this is my trading account, and obviously everyone else feels the same way, except the sheepish followers of these metal jockeys.If you don’t want to do all the work on your own you can use managed futures, as long as the actual trader has a good performance record.
Oil closed at $15.20, dropping to a three-month low Friday as the dollar surged and concerns about global economic growth weighed on demand expectations.
The fall came even as Russia sent forces into Georgia, a key energy transit region, to repel a Georgian assault on the breakaway South Ossetia region.
“It seems that we’ve got a lot of selling based on the stronger dollar,” said Jason Blaylock, Senior enegry anylist at Interwoven Capital.
“Energy demand destruction and the dollar return have formed a quiet alliance to bring the oil market down, and today the louder of the two is the dollar.”
Strong demand from emerging economies like China sent oil on a six-year rally, with prices up sevenfold at their peak.
More support came from investors rushing into commodities as a hedge against inflation and the weak dollar.
But mounting global economic problems and high fuel prices have begun to hurt demand, weighing on prices.
The dollar surged by commodity broker against the euro and was on track for its biggest one-day gain in four years as concerns mounted that the U.S. economic slowdown was spreading to the euro zone and around the world.
“The market has been ignoring the Tbilisi pipeline situation, and now the problems with Russia — the move lower really now has a momentum of its own with the financial players coming out,” said Olivier Jakob a Futures Broker at Petromatrix.
Georgia’s pro-Western president said Friday the two countries were at war as Georgian troops backed by warplanes pounded separatist forces in South Ossetia and Russia sent forces to repel the assault.
Energy Trading has become highly based on the public opinion from a speculation standpoint. With so much volitility due to over the counter cash swaps by commodity index funds. Managed Futures are a better alternative for private clients.
There are notable shifts occurring in the stock market on the dollar rally/commodities drop this week.
1) lower oil trading has been a notable help to retailers and airlines
2) lower commodity costs in general, from copper to grains to plastics, have been a big help to consumer and material stocks, many of whom have bitterly complained of rising raw material costs
3)A commodity broker the dollar rally has helped small cap stocks. Again today the Russell 2000, the main small cap index, is outperforming the S&P 500. In fact, since the dollar hit its recent low (July 15, the market bottom), the Russell 2000 has rallied 10 percent, while the S&P 500 is up only 5.6 percent.
Why small caps? They are not dependent on exports to grow, as multinationals are. The strong dollar makes exports more expensive and less competitive.
As for the large caps, modest rallies in airlines, autos, and retailers is to be expected on the lower commodities, particularly oil.
The U.S. markets ended the week on a positive note, cheered by a retreat in commodities, a Fed’s decision to keep rates steady at 2%, better-than-expected results in pending home sales, and a stronger dollar. The ECB also kept its key rate unchanged at 4.25%, as concerns over the health of the euro zone economy increase. The NASDAQ led the major indices, up 4.46% for the week, its best week since 4/18. In addition to today’s 300 point gain, the Dow managed a 331 point run on Tuesday, marking its biggest point gain since April 1. Offsetting the rally, disappointing retailer sales and new capitalization uncertainties from Fannie Mae (FNM) & Freddie Mac (FRE) weighed on U.S. stocks in the middle of the week.
Next Week’s Highlights: The futures markets will closely follow economic news on International Trade, the Consumer Price Index (CPI), and Industrial Production. The next batch of earnings will come mostly from retailers Wal-Mart, Macy’s, JC Penney, and Home Depot. Hewlett-Packard will also report
According to senior analyist & commodity broker Jason Blaylock, there shouldn’t be too much excitement in this drop in oil since 80 percent of the positions held at these levels are commodity index funds instructing their futures broker
to sell. “Nobody wants to get caught in institutions bulk selling through their over the counter cash swaps, that’s exactly what this is!”
