Posts filed under “Commodities”

Its Too Early to be Bullish on Nat Gas

I mentioned last week that we like the Energy sector, particularly Oil and Coal. The two stocks mentioned Arch Coal (ACI) and SunCor (SU).

Several people tagged me to ask about Natural Gas.The bullish argument is rising oil prices will drag Nat Gas with it.

The bear case, however, is controlling at the moment. Given the huge new finds in both shale rock frac-ing and Barnett and Haynesville finds, along with the Marcellus find, makes the fundamental supply story bearish. North America has a ~200 year supply of Nat gas.

The technicals are even worse: Nat Gas still in still in a deep downtrend (red line) – only a move above $4.60 (purple line) would suggest the secular bear move is over.


Chart courtesy of FusionIQ

Category: Commodities, Energy, Technical Analysis

Winding Down with an Xmas Rally

Here we are beginning the final 2 weeks of the year. The economy continues to limp along, improving, albeit rather slowly. “Recession fatigue” is likely to make this holiday consumption spree appreciably better than the past 2 years. Markets have looked a bit tired — and yet — every opportunity to see big whackage has…Read More

Category: Commodities, Fixed Income/Interest Rates, Gold & Precious Metals, Markets, Psychology, Really, really bad calls

Emerging markets: the risks are increasing

Emerging-market equity prices as measured by the MSCI Emerging Markets Free Index are primarily driven by commodity prices and in particular by metal prices as measured by the Economist Metals Price Index. Currently emerging-market equities are approximately 8 – 10% overpriced given the level of metal prices. Sources: I-Net Bridge; Plexus Asset Management. The ratio…Read More

Category: Commodities, Think Tank

Commodity prices – on a knife’s edge

by Prieur du Plessis, writer of the Investment Postcards from Cape Town ~~~ The prices of industrial metals find themselves at crucial levels as indicated by the Economist Metals Price Index in U.S. dollar – the latest number is my estimate. The upward trend since the market bottomed in the first quarter of last year…Read More

Category: Commodities, Think Tank

CFTC Judge Allegations Should Concern Investors

“It’s an open secret among my brethren that if you get Levine, he’s not going to rule for the investor.” -Steven Berk, an investor protection attorney in Washington > Michael Hiltzik of the Los Angeles Times takes Judge Painter‘s CFTC accusation against his fellow judge Bruce Levine to a new level: “It would be hard…Read More

Category: Commodities, Legal, Really, really bad calls

Is Gold a Shadow Currency ?

My friend and hedge fund manager pal Paul Brodsky is quoted in the WSJ discussing Gold as a Currency. “Over the past 30 years, the correlation between the dollar and gold is minus-0.65—a high negative correlation. It means the dollar and gold are effectively on opposite ends of a seesaw. When the dollar is in…Read More

Category: Commodities, Currency, Gold & Precious Metals

CPI, CRB Do Not Disprove Deflation Thesis

I try to find people to read who a) I disagree with 2) respect their methodology. It refines my arguments, and clarifies my thinking. Doug Kass is one such thinker. So too are Jeff Saut of Raymond James, and Peter Boockvar of Miller Tabak (Peter publishes the very fine Macro Notes blog here on TBP)….Read More

Category: Commodities, Currency, Economy, Inflation

S&P500 Priced in Gold

Here’s one for the Gold Bugs: > SPX Priced in Gold click for larger chart courtesy of The Chart Store Note this does not include last week’s market action . . .

Category: Commodities, Gold & Precious Metals, Markets

500 Year CRB Index (Annual)

I love the mere concept of this chart from Jim Bianco — the CRB Index going all the back to the year 1,450: > courtesy of Bianco Research > About now, you may be saying to yourself, “How on earth could anyone find this ancient data — and can it possibly be accurate?” The answers…Read More

Category: Commodities, Cycles, Technical Analysis

Does Baltic Dry Freight Index Lead Commodity Prices ?

Interesting parallels between the cost of shipping dry goods, and the prices of those goods themselves. The caveat is the past 2 years have been  somewhat aberrational, and we would need to see much longer history: Baltic Dry Freight Index vs. CRB Index (weekly basis) Hat tip Bill King

Category: Commodities, Technical Analysis