Commodities

When Jim Rogers Speaks . . . .

Jim Rogers is one of the kings of trading (though he probably thinks of himself as an investor).  So when he says something, the wise trader should at least cock their ear in his direction.

But the wise trader will also bear in mind that Rogers is Fundamentalist, and timing a trade on fundamentals has a way of requiring much more courage than this timorous trader can usuall muster.  So take a peek at what he has to say here, and if it makes sense to you remain on the lookout for some substantial Technical trigger before taking his advice (that’s my advice, at least).

 

Short US Government Bonds ‘Right Now’: Jim Rogers

Published: Thursday, 7 Feb 2013 | 4:53 PM ET
By:

With the Federal Reserve and now Bank of Japan printing massive amounts of money, billionaire investor Jim Rogers told CNBC’s “Closing Bell,” he is shorting U.S. government debt.

“It’s all artificial what’s going on right now,” Rogers said. “The Federal Reserve is printing money as fast as they can. The Bank of Japan said ‘we’re going to print unlimited money.’”

He called the Fed’s monetary stimulus “outrageous.”

– Article Continues Below –


All that money printing has Rogers bearish on U.S. Treasury debt. He said he’s shorting government bonds and that if it’s indeed the end of the 30-year bond bull market, those shorts will pay off. In particularly he said it’s time to short long-dated U.S. government debt.

“Stocks may go up too, but I don’t know how this can last too long,” he added.

While Rogers is negative on the U.S. stock market and said he’s been short Apple since the fall, he sees better opportunities in Japan and Russia.

The Bank of Japan’s money printing is not good for the world he said, but it’s making markets go up. “The yen is collapsing, but the stock market is going through the roof,” Rogers said.

And while the Federal Reserve is also printing money through its quantitative easing program, Rogers noted that the U.S. equity market is flirting with all-time highs, while Japanese stocks are down 75 percent from their all-time high. . . .

See the rest of this execellent article here . . .

 

Friday, February 8th, 2013 Commodities, ETF, Jim Rogers No Comments

How to Trade Futures Along With the Smart Money


This is a great little article about ignoring ‘common wisdom’, at least inasmuch as it applies to setting your trading expectations.  One of the most important psychological elements of being a trader is being something of a maverick.  It is certainly more fun than following a herd of donkeys!
By Ross Beck | TradingMarkets.com | November 19, 2010 11:35 AM
 

I think we’ve all heard that 90-95% of futures traders blow up their trading account. How does that make us feel? These statistics may prevent some people from even trying. But is it possible to use these numbers to our advantage?

One of the most important concepts to understand regarding trading is that “the public” is always wrong. This can be useful information, however. To quote Larry Williams, “There is one little problem… WE are the public!”

In other words, we have to fight the traditional trading and investing programming that we’ve listened to our whole lives! We will no longer follow the herd; traders are mavericks. Therefore, don’t expect to win popularity contests in online trader chat rooms. Most of the these chat rooms are filled with paper traders who have yet to put money in the markets and who love to talk about the trades they “did” and how bright they are. If you feel a need to hang out in these chat rooms, I would suggest you enter these rooms to determine what trades most of them are taking and take the other side!

This may sound strange to you if you haven’t heard this before but we have to be a contrarian. If this philosophy is hard to swallow, consider the following facts. The Commodity Futures Trading Commission publishes a report every week called the Commitment of Traders (COT) report. The report is sometimes referred to as legal inside information due to the fact that any futures trader that holds a reportable position overnight has to inform the government. Reportable positions are open futures positions that are sizable and not typical of a small retail traders position.

From the COT data, we are able to determine what the net positions are for the large commercial traders and the small retail trader. Sometimes there is no significant difference between the commercials and the small traders (the public.) However when there is a significant difference, pay attention!

COT Chart

For example, let’s imagine that there has been a bearish trend in soybeans for the past six months. We look at the Commitment of Traders report and it says that the small retail traders are significantly more short than long. In fact, they haven’t been this short for about two years. Now we turn to the commercials and their net open positions. The COT states that the commercials are significantly more long than short, and they haven’t been this long for two years. This is useful information as the commercials and small retail traders are polar opposites at this point. Guess who is going to win this fight? Remember the golden rule? The one with the gold makes the rules? Yes, the commercials always win and the public is always wrong.

When you see the charts to prove the above COT example, you truly will become a believer in the fact that the public is always wrong! Armed with this contrarian information, we can give ourselves an edge when it comes to trading futures, and it will help us avoid staying in the 90-95% club.

Ross Beck, FCSI (AKA Mr. Gartley) is a Fellow of the Canadian Securities Institute and world renowned public speaker on technical analysis. Ross writes The Climb newsletter for Majestic Peak Trading and the Gartley Trader newsletter at gartleytrader.com. Click here for more information.

Friday, October 7th, 2011 Commodities, Education, Evergreen No Comments

Cramer: Enbridge: The Pipeline Play

Jim Cramer provides some welcome insight into a stock play which leverages oil without directly trading either the commodity or the big oil companies themselves. Take check it out.


Friday, September 16th, 2011 Commodities, Jim Cramer, Stock Trading 1 Comment

John Murphy’s Key to Success: Simplicity

by JimWyckoff

 
“My work has gotten better due to simplifying my approach,” John J. Murphy, the veteran technical analyst, author and CNBC resident technical analyst, told a group of equities and futures traders attending the Technical Analysis Group (TAG) XVIII trading conference sponsored by Dow Jones Telerate in New Orleans.

Murphy said he relies heavily on five or six “useful” technical indicators, including relative strength indicators, trendlines, moving averages, Bollinger bands, classic chart patterns such as triangles and double tops, and Fibonacci retracement levels.”You must trade a combination of technical signals, not just one” indicator, said Murphy. He said that many times he’ll set up a “good” column and a “bad” column regarding technical studies. If the “good” column has the overwhelming evidence supporting a selected trade, Murphy will enter the trade. But if the evidence supporting a trade is not strong enough, he’ll bypass the trade.

Murphy correctly called the topping of the U.S. semiconductor stock index (SOX) during midsummer (of the year this story was written). His reasoning was plain and simple: the SOX uptrend line was broken, followed by a double-top formation. “The first sign of a top is breaking of an uptrend line,” he said.

On moving averages for individual stocks, Murphy likes to use the 50-, 100-, and 200-day moving averages. If the 200-day moving average on an individual stock is broken on the downside, “big trouble” is in store for that stock. Also for stock sectors, he said if a 50-day moving average breaks down, “that sector is in trouble.”

Charting a stock market sector divided by the S&P 500 is a favorite method the veteran technician uses to determine if a given sector is underperforming the broad market. (Examples: SOX index divided by S&P 500 index, or NASDAQ index divided by the S&P 500 index.)

Another good technical indicator is the Moving Average Convergence Divergence (MACD), said Murphy. The MACD uses exponential moving averages, as opposed to the simple moving averages used with an oscillator. Gerald Appel is credited with developing the study.

Longer-term technical signals are more powerful than shorter-term signals, said Murphy. “Longer-term charts give you the value of perspective,” he said.

Many traders consider Murphy’s book, “Technical Analysis of the Futures Markets” to be the bible of technical analysis.Murphy heads his own consulting firm, based in Oradell, N.J.

 

http://www.traderplanet.com/articles/view/16-john_murphy_s_key_to_success_simplicity

Gold, Oil & the Dollar: Correlation Breakdown Is Concerning Says Yamada

Over her multi-decade legendary career, technical analyst Louise Yamada has seen all kinds of markets and probably analyzed more than a million charts. For Macke to refer to her as a “national treasure” speaks volumes about the quality and value of her work. It is also precisely why I take notice when I hear Louise call anything “amazing.”

“What’s amazing is everybody talks about the correlation between dollar direction and commodities, but the dollar has done absolutely nothing, flat for months, yet gold went up and oil went down, so there was no correlation,” says Yamada. This means “the dollar is starting to lose that correlation perhaps because the perception of the dollar as the reserve currency is starting to drift away.”

As much as that supports Yamada’s belief that the dollar is in structural decline, the weak dollar/weak oil phenomenon could also be an indictment of a weak economy. For further proof of that she points to interest rates which “had seen higher lows in 2010 and 2011 and now those lows are being breached.”

For Yamada this suggests we could be looking at a more serious global slowdown than we think. “What’s more disconcerting to me now is…evidence at the long end, where interest rates were starting to pick up, is now dissolving and that I think is problematic in the sense that it’s telling us that there is more fear and concern out there.”

Geez Louise, you’re bumming me out. But if she is right, expect crude oil to “stay in a low trading range of $67 to $90″ and gold to make its way towards $2000 an ounce.

 

“Gold is in a structural bull market. It has maintained its 2009 uptrend on every pull back that has taken place and now you’ve had a rather accelerated advance to $1800,” says Yamada.

Perhaps to assuage Macke -who confessed to buying back into gold after selling it in a move only he could describe as having all “the discipline and restraint of Charlie Sheen at the Adult Video Awards”- Yamada says since 2009 we have seen a series of 20% gains followed by consolidation and “would use any weakness to continue to add to positions.” She “absolutely loves gold!”

Add it all up and this Friend of Breakout says it encourages her to stay on the sidelines. “It suggests there’s confusion, there’s not a definitive trend, and if there’s not a trend you shouldn’t be playing.”

Thursday, August 18th, 2011 Commodities, Education, Stock Trading No Comments