Is Div Comm Swp Discussion Threads

[trumpet] 09/5/2003 23:32

There she blows......

[trumpet] 09/5/2003 20:37

Looks like it ;-).

[jdeltablues] 09/5/2003 19:58

Last week was certainly the right time to buy corn! I really ought to start following my own advice :-(

[jdeltablues] 09/5/2003 15:56

Yep, CRB is starting to look a bit more interesting now. It seems as though every market is betting on a stock market fall. Except for the stock markets, that is :-)

Oil seemed to catch a bid yesterday:



Bonds have been very strong recently; yesterday, the 10-year notes broke out of their trading range and were at their highest since February 1999.



Euro also at its highest level since the last millennium:

[trumpet] 09/5/2003 14:07

Still looking at the CRB ;-).

[jdeltablues] 04/5/2003 14:15

Livestock markets looking strong:

[jdeltablues] 30/4/2003 19:06

Coffee going like the clappers in NY since it last tested the 60 mark:



Soyabeans and meal also very strong - SARS fears maybe?

[jdeltablues] 27/4/2003 22:02

And a more recent Daily Reckoning commentary, from last week. This touches on what I think will be one of the main "investment themes" of the decade - the rapidly increasing demand for commodities from China and other Asian countries as they industrialise.

INCREMENTAL DEMAND
by Marc Faber

American policymakers have repeatedly emphasized that a war
against Iraq has nothing to do with gaining access to Middle
Eastern oil and with increasing Iraqi production in order to
depress oil prices.

I am inclined to give them the benefit of the doubt, but it
is clear that in the years to come the demand for oil will
grow dramatically should the living standards in emerging
economies in particular, in China continue to rise. I was
recently in Vietnam, a country with an annual GDP per capita
of approximately US$300. I was stunned by the sight of what
seemed to be millions of motorcycles crowding the streets of
Hanoi, Ho Chi Minh City, and the coastal city of Danang,
where five years ago there were very few!

This was especially surprising, since there is not yet a
consumer credit system in Vietnam.

In China, passenger car sales soared by 56% in 2002, and
motor vehicle sales now exceed 1 million units per annum.
Indeed, it is a fact that with rising incomes and higher
standards of living, people in emerging economies do
gradually shift from using bicycles to small motorcycles and
then to cars. And if this trend continues, which in my
opinion is inevitable, then energy consumption in emerging
economies with their large consumer markets that are far from
reaching any saturation point will continue to increase very
substantially.

Oil consumption per capita soared in Japan between 1950 and
the early 1970s; the same pattern occurred in South Korea
between 1965 and 1995, as its industrial production jumped.

In both cases, annual per capita oil consumption rose from
around one barrel to around 17 barrels within a period of
less than 30 years a seventeenfold increase! I would not be
surprised, therefore, if China's oil consumption more than
doubled every six to 10 years for the next 20 to 30 years.
(It has doubled over the last seven years.) And since China
became a net importer of oil in the mid-1990s, such an
incremental demand would have to be met by imports.

The rising thirst for commodities isn't limited only to China
and oil, but is visible in every other emerging economy that
is rapidly industrializing and for all types of commodities.

In particular, I should like to mention that in India and
Vietnam, where economic reforms have begun to stimulate the
domestic economies, the demand for commodities should also
rise considerably in the years to come. Oil aside, the
consumption of other commodities is poised to rise as well.

Let's take China's consumption of copper as an example. Its
consumption as a percentage of total world consumption has
increased from 6% in 1990 to 12% in 2000 and 16% in 2002, and
is expected to reach 29% in 2010 (statistics provided by
Simon Hunt of Simon Hunt Strategic Services,). Thus, we
should assume that commodity prices near-term profit taking
aside are poised to move up much further in the years to
come. This would be particularly true if there was a war now
or sometime in the next 10 years or so. In the past, major
wars produced significant temporary upside distortions for
wholesale prices.

The war cycle will shortly turn up, and increased
international tensions in the years to come will negatively
affect stock valuations around the world.

An increased frequency of conflicts will be positive for
commodity prices but negative for international trade and for
bonds. In particular, tensions could lead to a slowdown of
international capital flows and, in the worst-case scenario,
to the freezing of assets by some governments. The United
States is financially ill-equipped to finance its global
leadership position, given the rising budget deficit and the
gargantuan and growing current account deficit.

The present stock market and dollar rally may continue until
late April or early May, since we are entering a period of
seasonal strength.

But once investors again focus on economic issues, the rally
is likely to peter out and new lows later in the year or in
2004 should not be ruled out.

Cheers,

Marc Faber,
for The Daily Reckoning

P.S. We remain negative about financial stocks and housing
companies. High- tech and telecommunications stocks and the
German Dax Index seem to offer the best rebound potential, as
short-sellers may be compelled to cover their short
positions.

In terms of sectors, we like stocks of oil, oil servicing,
and mining companies.

Editor's Note: Headquartered in Hong Kong for the past 20
years, Dr. Marc Faber is the editor of The Gloom, Boom and
Doom Report. Looking ahead to where the real growth
opportunities of the next 30 years lie, Dr. Faber has
distilled his analyses into the ground-breaking book,
"Tomorrow's Gold" - a wake-up call to Western investors.

[jdeltablues] 27/4/2003 13:32

Another one for US equity traders - the Chicago Mercantile Exchange floated last year and is traded on the NYSE. Chart looks tradable as well:

[jdeltablues] 27/4/2003 13:22

The grain markets often make a secondary low around 1st May, for technical reasons connected with the expiry of the May contracts. If you're bullish on grains, this coming week should be a good time to go long (but DYOR).

[jdeltablues] 27/4/2003 13:07

One for US equity investors - this article appeared on the Daily Reckoning a few weeks ago. I've also posted it on on North American oil and gas stocks.

UNDERDOG OIL
by John Myers

Most of the world is focusing its attention on the terrible
saga of conflict in Iraq. More specifically, it is
collectively wondering - statesmen, investors, Espace
owners and oil chieftains alike - what will become of
Iraq's potentially mountainous supply of crude oil.

I don't blame them. But in a world of increasingly volatile
geopolitical tensions, I've argued for months that US
domestic supplies of oil and gas will become increasingly
vital to the well-being of the American economy, creating
an interesting investment opportunity. That's why I
recommend stocks like Suncor Energy, a company that
literally "mines" oil from tar sands in Alberta, Canada.
Despite the unusual geological nature of Suncor's reserves,
it's "syncrude" refines into gasoline and jet fuel just as
well as Saudi oil.

The one important difference between the two versions of
crude oil is that Suncor sits right next door in Canada,
not halfway around the world in the middle of the Arabian
geopolitical tinderbox. What's more, Suncor's reserves are
considerable.

The Athabasca Oil Sands, where Suncor runs its operation,
is the largest of these oil sands deposits. It contains
over one trillion barrels of bitumen on its own, although
only about 300 billion barrels of bitumen can be recovered
using current methods of mining. By comparison, Alberta's
conventional oil reserves are currently estimated at about
4.5 billion barrels of oil. Even more significantly, the
Athabasca Oil Sands contain more oil than all the known
reserves in Saudi Arabia.

Suncor is but one example, albeit a very unique one, of a
company possessing large North American oil reserves.
Finding companies with domestic oil reserves isn't too
difficult, but finding companies with considerable and/or
growing reserves is very difficult indeed.

Here's why: North America has been "drilled out", and
substantial finds have become virtually impossible to
discover. By next year, humanity will have consumed about
half the oil that the world holds under its crust. Of the
'yet-to-find oil', pegged at around 150 billion barrels -
half is estimated to rest beneath the sand of just five
Middle East countries: Iran, Iraq, Kuwait, Saudi Arabia and
the United Arab Emirates.

By contrast, much of the "already-found-and-consumed" oil
came out of the ground in the US. More exploratory holes
have been drilled in the continental United States than in
the rest of the world combined. The United States (48
states) oil discovery rate hit its maximum in 1957 and has
since decreased. Proven US (48 states) oil reserves peaked
five years later, in 1962, and have been diminishing ever
since. The US oil production rate reached its peak in 1970
and has also been declining ever since. For this reason,
the United States now relies on foreign sources for more
than half of the oil it consumes. This is a number that
will continue to grow.

America's increasing reliance on foreign supplies is a
certainty, especially since the US Senate recently rejected
proposed oil drilling in the Alaskan National Wildlife
Refuge. But the more it must rely upon foreign oil, the
greater the appeal of a company like Suncor, which is
sitting on vast domestic reserves.

Because high-quality companies in the oil stock sector have
been lagging behind the strong rallies in both oil and gas,
we think the timing has never been better to snap up the
shares of companies with large North American reserves.

As my colleague, and occasional Outstanding Investments
contributor Andrew Kashdan pointed out recently, "Very few
resource stocks have kept pace with their related
commodities. And that bizarre divergence may present a
terrific investment opportunity, even for the most cautious
of commodity bulls".

For example, natural gas prices have soared more than 260%
over the past year and a half. Amazingly, however, the XNG
Index of natural gas stocks - which consists of 15 major
gas producers, including Anadarko - has actually declined
by more than 8% over the same period!

"A temporary pullback in natural gas prices would hardly be
surprising, given the spectacular recent rallies," Kashdan
surmises. "But we think that the natural gas bull market is
the 'real deal'. Therefore, we suspect that the shares of
many natural gas companies are too cheap because they are
pricing in a worst-case scenario that is highly unlikely to
occur."

Furthermore, supply and demand trends in the natural gas
sector are extremely bullish for gas prices. On the supply
side, total US gas production volumes were down about 5% in
2002 and could be down again this year. Natural gas in
storage is nearly 50% lower than it was a year ago. A cold
winter has supported prices, but we think they will remain
firm even after seasonal demand declines. All in all, APC
should be realising very high prices for its natural gas
this year, and a boost in earnings and cash flow will be
close behind.

Over the last few months, we have tipped off our
Outstanding Investments subscribers to several
opportunities in the North American oil and gas sector. One
example is Petro-Canada, a company that is set to become
Canada's largest petroleum producer.

Petro-Canada is likely to increase output of crude oil by
48% this year to about 364,000 barrels of oil per day on
average. Including natural gas, production should exceed
500,000 boe (barrels-of-oil equivalent) per day. This
increase is double the average growth rate of Canada's top
five oil companies and puts Petro-Canada ahead of its two
main rivals Imperial Oil Ltd. (a unit of Exxon Mobil) and
Shell Canada Ltd. (Royal Dutch/Shell Group).

Talisman Energy is a different sort of play on domestic
oil. The company recently unloaded its problematic oil
properties in the Sudan, looking to re-focus its efforts on
properties back home in North America.

The core truth about Talisman is this: the company is rich
in oil and gas reserves. At the beginning of 2002, Talisman
held proven reserves of 1.5 billion boe, up 26% from the
year before. And the lion's share of it is tucked safely
beneath the Western Canadian foothills and prairies.

When it comes to investing in today's energy companies, we
strongly believe that those with North American reserved
are worth a closer look.

Regards,


John Myers,
for The Daily Reckoning


Editor's note: John Myers - son of the great goldbug C.V.
Myers - is the editor of Outstanding Investments. Our man
on the scene in Calgary, John has his fingers on the pulse
of natural resource profits - including oil, gas, energy
and gold.

[jdeltablues] 21/4/2003 14:31

There was some discussion earlier about the Turtle trading system. If anyone's still interested, the rules are available from

[jdeltablues] 16/4/2003 22:17

Had a nasty shock yesterday when I received a statement from my broker (Infinity in Chicago) showing that my account had gone short no less than FIVE coffee contracts on Monday at practically the low of the day. This is equivalent to nearly $2000 per point. My account only has $10,000 in it!

Fortunately they cancelled it the following day after I complained - otherwise I would be down over $5,000 by now - but I really don't need that kind of stress. I dread to think what would have happened if it had got to the stage of causing a margin call. This is the second phantom trade in less than three months.

I have heard that when crooked brokers see a chance of a big move, they make a phoney trade by buying and selling in different accounts and then move the one that works into the account of a favoured client. This is (allegedly) how Hillary Clinton managed to turn $5000 into $100,000 in a few months trading cattle futures. I have no idea whether this is what happened here but even if it was just an order entry error I'd rather trade through someone who can type accurately.

[big vern] 16/4/2003 00:30

I'm still short

[indalo] 16/4/2003 00:26

ok Nirvs....I'm still short but will consider taking some profit

[nirvs] 16/4/2003 00:10

Closed London Cocoa shorts for 35 pts. I feel it should have dropped heavily two days ago. It did not, so I am out.

[nirvs] 15/4/2003 15:50

Excellent indalo!

[indalo] 15/4/2003 15:48

Just covered a quarter of my bet at 1205....but it looks ok to me, so leaving the rest for now

[analyst] 14/4/2003 14:17

May Sugar (#11) is showing one of the classic set-up patterns today - the so-called "HVR-NR4/IB" wind-up. This implies a breakout one way or the other is likely. It is in a nice downtrend too.

i.e. there is reduced Volatility with the last session being a Narrow Range bar that is thae smallest of the last 4 sessions and which is also an 'Inside Bar'.

[nirvs] 13/4/2003 17:50

This is a good site for charting an analysis on commodities.



Also the RICI index:

The Rogers International Commodity Index represents the value of a compendium (or "basket") of commodities employed in the global economy, ranging from agricultural products (such as wheat, corn and cotton) and energy products (including crude oil, gasoline and natural gas) to metals and minerals (including gold, silver, aluminum and lead). As of October 15, 1998, there were thirty-five different contracts represented in the Index. The value of each component is based on monthly closing prices of the corresponding futures and/or forward contracts, each of which is valued as part of a fixed-weight portfolio. Near month contracts on international commodity markets are employed to the extent possible. The selection and weighting of the portfolio is reviewed not less than annually, and weights are assigned in the December preceding the start of each new year.

The index was developed by Jim Rogers to be an effective measure of the price action of raw materials on a worldwide basis. The broad based representation of commodities contracts is intended to provide two important characteristics: The large number of contracts and underlying raw materials represents "diversification" and the global coverage of those contracts reflects the current state of international trade and commerce. Accordingly, In many cases, allocation of a portion of an investment portfolio in a product based on the Rogers International Commodity Index may reduce overall volatility while providing the opportunity to profit, assuming the continued growth of the global economy and that such growth translates into higher prices for those commodities.

Choice of commodity markets and contracts

Rogers International Commodity Index (RICI) is based on monthly closing prices of a fixed-weight portfolio of the nearby futures and forwards contract month of international commodity markets. The selection and weighting of the portfolio is reviewed annually and weights assigned in the December preceeding the start of a new year. If a commodity is traded on more than one exchange, the most liquid, in terms of volume and open interest combined, is included in the RICI. For example, silver is traded at the New York Commodity Exchange, the Chicago Board of Trade and the Mid-America Commodity Exchange. The largest volume and open interest is consistently transacted at the New York Commodity Exchange, consequently, this contract represents silver in the RICI at the exclusion of the contracts at the Chicago Board of Trade and the Mid-America Commodity Exchange.

Jim Rogers Index Composition

Crude Oil 35.00%
Palm Oil/Soybean Oil 2.00%
Wheat 7.00%
Live Hogs 1.00%
Corn 4.00%
Sugar 1.00%
Aluminum 4.00%
Azuki Beans 1.00%
Copper 4.00%
Cocoa 1.00%
Heating Oil/Diesel 3.00%
Nickel 1.00%
Unleaded Gas 3.00%
Tin 1.00%
Natural Gas 3.00%
Wool 1.00%
Cotton 3.00%
Rubber 1.00%
Soybeans 3.00%
Lumber 1.00%
Gold 3.00%
Barley 0.77%
Live Cattle 2.00%
Canola 0.67%
Coffee 2.00%
Orange Juice 0.66%
Zinc 2.00%
Oats 0.50%
Silver 2.00%
Palladium 0.30%
Lead 2.00%
Silk 0.15%
Rice 2.00%
Flaxseed 0.15%
Platinum 1.80%

TOTAL 100.00%

Up 34% last year!

[indalo] 12/4/2003 17:07

Ape, you can trade the CRB through IG and other spreadbetters...

[trumpet] 12/4/2003 16:08

Theape,

The CRB index is the one that is most often quoted and used (albeit skewed towards foodstuffs) - so a good overall measure of inflationary pricing pressure. For the industrial demand side copper and lumber might be worth watching - I stand to be corrected on those though ;-)

I use www.ino.com for charts (good traders BB too).

[theape] 12/4/2003 16:00

Hi guys.

I'm starting to look at some intermarket relationships, and am interested in the general trend, turns in commodity prices.

are there any "basket" commodity indicators that give an idea on economic inputs.

[indalo] 11/4/2003 18:47

thanks delta...

looks good doesn't it Nirvs!...a weekly close decisively below support and it closed at the low too. Should see some immediate follow through Monday IMO. I will add on any rise to 1250, as that should be resistance now. I moved my stops to 1285 today.