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Branchville, Alabama | I Certainly consider it an privledge to have a discussion with SC & Wy Dave and others. I have a great respect for your opinions.
As a 30yr commod trader and ex broker the short side of the market has always been the side I favor. it is the side to profit from from my perspective.
But the markets seem to be signaling something far from the conventional wisdom. I ask myself why has the bear market move stalled? Is this simply as bear mkt rally?
Well who is buying this market? Not John Q Public that's for sure. Insider buying -nope their as scared as anyone. Wall street hedge funds or investment banks=not hardly. So who is it? well it's private money-large investors worldwide.
the market had huge downward momentum. What stopped it?
in 29 the market dropped 90%. The chinese mkt has dropped 70% why we stopped at 40% makes me think there is a reason. Momentum is a very difficult thing to overcome in markets. That has been proven over and over --dot com-housing-08 grain mkt-grain market in the 70's-29 crash and on and on. market over exceed the reality due to moemtum and perception.
The spike in volitility is worth taking note of in the stk mkt. Spike in volume of cotton mkt at 40 is worth watching. The turn in tanker shipping rates is worth watching.
Look, everyone is bearish from the grocer to the preacher to the farmer. When everyone is on one side of the see-saw the outcome is forced and predictable.
why is the corn mkt going up when the fundamentals are so bearish. Demand is pitiful. Carry is headed to 2bil. --but the mkt rallies. I thought grain prices were in a bubble and they were. 8$ corn is not sustainable. Either demand or supply was destined to remedy that price level. I do not think double digit bean prices are sustainable but we have them. These are not depression type levels.
Prices are a reflection of all known facts at any given point in time and that includes fundamentals and excessive speculation or lack thereof.
current price may not be a correct prediction of future price but is the equilibrium of all facts at a given point. When that price is contrary to prevailing public perception it is worth taking notice. In other words somebody knows something.
Remeber when Japan was the "model" economy? reminds me of the China perception now. They are not the herd boss. The US is. Make no misake about it.
They depend on our $ not we on theirs. You cannot strenghten your customer by weakening them. Our best interest is thier best interest. We are to the world econ. what wal-mart is to retail. Can wal-mart do without a vendor better than the vendor can do without wal-mart? Absolutely!
The biggest threat I see to the US position is not the debt we have, although a problem, it is the rapid move we are making toward socialism. Thay will bring us down.
But alas that is another discussion.
anyway the down momentum has stopped. I do not see a robust recovery but I do think the worst has come from a mkt perspective.
BTW MR. SC they say we may not be as good as we once were but we are as good once as we ever were. --Well it's a nice thought anyway!
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recovery-when will it come?
