metals

Update: Silver is having a bad day.

Will it be meaningful?

Last week I noted the price action in gold and silver. The patterns were mostly similar, but the technical indicators and oscillators suggested different outlooks for each precious metal. I asked if silver's relative strength bode well for gold, or if gold's relative weakness bode ill for silver.

After today, it seems gold's bearish tilt is weighing on silver. Click on the link below for a chart and additional commentary.

Commodities Essential. UPDATE 4 December 2012

 

Trade Essentials.

No new recommendations or adjustments at this time.

What are hedge funds telling us?

Is hedge fund positioning a forward looking indicator ... or, rather, a contrarian indicator? Bullish bets proved to be a good contrarian indicator for crude prices this year. A case could also be made to bet against the increased long interest of speculators in silver. But it probably makes more sense to bet against long interest in crude oil. And perhaps it also makes better sense to bet against the specs in copper ... 

Commodities Essential. 17 August 2012

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No new recommendations or adjustments at this time.

The political economy deserves a precious medal.

I recently mentioned the potential for a major crisis of confidence ... sparked by seizures, scandals and distrust in the financial system ... that would counteract (and even overwhelm) the reflationary trade to some degree. That, of course, assumes something will happen beyond the control of politicians and get the snowball rolling. While possible, I suppose that was a pretty big assumption.

Many actions taken by policymakers to influence the economy are readily apparent, e.g. quantitative easing, fiscal stimulus, new legislation, etc. But there are items that go largely unseen that are hugely critical in controlling the political economy.

Commodities Essential. 10 August 2012

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No new recommendations or adjustments at this time.

Charts

The European Central Bank seemed to have disappointed investors yesterday after a lack of action sent markets reeling. The July US Nonfarm payrolls were reported better than expected today, which has so far sent markets soaring. With no clear advantage to the bulls or bears right now, I think it makes sense to sit tight. Here is what I'm looking at for commodities: 

Commodities Essential. 3 August 2012

Trade Essentials.

No new recommendations or adjustments at this time.

Alert: adding two new positions.

Let's short SLX and go long AGA.

We've taken some lumps lately as the correction in commodities extended. But I suspect much of that backing and filling is out of the way and fundamentals will dominate price action again. I recommend adding two new positions.

Trade Essentials.

Here is what I suggest you consider doing now:

 

SLX (Last price: $40.54)

SELL SHORT shares of Market Vectors Steel ETF, symbol SLX, at the market. Then place an order to BUY-TO-COVER ALL your shares of Market Vectors Steel ETF, symbol SLX, at $44.53, STOP; this order is good till cancelled.

 

AGA (Last price: $14.80)

Buy shares of PowerShares DB Agriculture Double Short ETN, symbol AGA, at the market. Then place an order to SELL ALL your shares of PowerShares DB Agriculture Double Short ETN, symbol AGA, at $13.77, STOP; this order is good till cancelled.

[For those seeking a non-leveraged way to play AGA, I recommend selling short PowerShares DB Agriculture ETN, symbol DBA, with a stop loss above $30.40. Note: this alternative to AGA will not be tracked.]