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| You can take it one step farther, I think. In my link posted below, there are a couple of charts where I show (in the cattle and feeder cattle markets) how you can be long futures in a big bull market and lose lots of money. Futures contracts are priced based on *expectations* of the fundamentals. We trade the changing expectations of those fundamentals. I think there is a chart of NG still on that Flickr site too - showing a nearest futures contract compared to a roll-adjusted contract. IMHO, this chart is a perfect example of what expectations of fundamentals can do too.
Historically, there has been a well known ten year cycle in cattle. Lately it seems to have become less clear - possibly due to how the feeding industry has changed. But, the previous highs were (from memory, at least - and possibly on a roll-adjusted contract) 2003 and 1993. Like you say: "Just giving a heads up!" | |
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Nose bleed territory in cattle?
