Michael Porfirio Mason
AKA The Peoples Champ
AKA GFK, Jr.
AKA The Sly, Slick and the Wicked
AKA The Voodoo Child
The Guide to Getting More out of Life
http://www.thegmanifesto.com
Michael Porfirio Mason
AKA The Peoples Champ
AKA GFK, Jr.
AKA The Sly, Slick and the Wicked
AKA The Voodoo Child
The Guide to Getting More out of Life
http://www.thegmanifesto.com
The Clipse – Till The Casket Drops – Kinda Like A Big Deal f/ Kanye West
For the last year and half we have gotten bad news about the economy and we are now starting to see more favorable news trickle in, the key is to be objective and to look at everything. It seems that all the markets are interconnected as the metals trade with the currencies, energies with equities and all agriculture seems to move together. Observe relationships and follow the flow of money. For instance, we’re not in a bull market in stocks but investors who have ignored equities because of a bad experience have missed a huge move, oil inventories are at an 18 year high but oil has moved $9 higher in the last 2 weeks. There is virtually no demand for cotton, yet prices have advanced 40% in the last month. Natural gas prices look cheap, however that was also the case 2 months ago, since then prices have dropped an additional $2. I guess what I’m getting at is don’t ignore the good or bad news and be more critical when making decisions in your portfolio.
To find out exactly how we are positioning our clients in commodity futures and options,
Contact us today at 1-888-920-9997. Don’t forget to tell them The G Manifesto sent you.
Energies
The US Department of Energy said crude oil supplies were up 4.1 million barrels, supplies of gasoline were down 4.7 million barrels while heating oil supplies were up 1.5 million barrels. June crude oil closed up $1.75 to post its second positive week in a row closing over $9off the previous week’s low. Energy prices appear to be pricing in a recovery and pick up in demand for later this year, though there is no support for that conclusion. That being said, prices may have gotten ahead of themselves and a correction is probable. Support is seen between 51.50/52 with resistance at 53.50 followed by 54.50. This week’s direction may be determined more by outside influence such as NFP and the stress tests as energies seem to be taking leadership from equities. June heating oil was higher by 1.26 cents which is not too impressive all things considered. Support comes in at 1.36 and resistance between 1.40/1.42. June RBOB was higher by 7.72 cents making its way to a 6 week high. Support is seen between 1.45/1.4650 with resistance at 1.5450. We have advised clients to put in GTC profit orders on any 20 cent July and August call spreads. We have a chance of seeing a move thru 1.57 this week which would trigger buy stops.
The US Department of Energy said underground supplies of natural gas were up 82 billion cubic feet to 1.823 trillion cubic feet. Supplies are now up 34% from a year ago and up 23% from the five-year average. June natural gas ended up 16 cents or 4.7% on the week. Signs of stabilization in the manufacturing sector may well point towards a recovery in the industrial usage that has been lacking. Resistance comes in at the 20 day moving average at $3.63 which prices have not closed above since 3/25. The fact that we printed a new contract low and prices held is a positive sign, for now support should hold at 3.35. A trade idea; we will start to explore selling August $3 puts and buying 6 September $8 calls for even money. We would expect to keep the premium on the put and on an explosive move higher over the next few months trade out of the calls which presently would be deep out of the money.
Livestock
After the close Friday, the USDA estimated the week’s beef production at 516.7 million pounds, down 3.2% from a year ago. June live cattle ended 15 ticks higher, in spite of concerns that beef exports will be slower on the Swine flu concerns. Support is seen between 81.50/81.75 with resistance at the 9 day moving average at 82.10. August feeder cattle were off by 115 ticks closing at a 4 week low as it appears prices are heading lower. Resistance is seen at the 9 day moving average at 99.85 with support at 97.80 although we cannot rule out a trade below 97.00.
Pork production was estimated at 418.4 million pounds, down 2.7% from a year ago. Countries abroad announced that they will not import pork from the US due to Swine flu despite statements from world health officials that consuming pork is safe. Hogs are getting a bad wrap being there is no evidence that hog populations are suffering and outbreaks are traditionally named according to their origin. Last week the named was changed to the H1N1 virus from Swine flu but has the damage already been done? June lean hogs finished down just over 6 cents last week making new contract lows. We have advised aggressive traders to buy; buying June 72 calls for 90 points looking to exit at 200 points on a rebound. Also we have client’s long futures from 64.50/67.50 expecting the gap formed last week to be filled in coming weeks on a trade back to 71+.
To view our full commentary which includes the sectors of energies, livestock, currencies, financials, grains, softs, and metals, subscribe to our 4 week free trial by visiting this link: http://mbwealth.com/subscribe.html.
_____________________________________________________________________________________Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Before trading MB Wealth recommends that you should carefully consider your financial position to determine if commodity trading is appropriate for you. All funds committed should be purely risk capital. Past performance is no guarantee of future trading results. There are no guarantees of market outcome stated, everything stated above are our opinions. Calculations of profit and loss have not factored in commissions and fees.
It is viewed by many that a modest increase in commodity prices is a sign that demand is coming back to the market. We need to point out demand is only one side of the equation, the other being supply. We do agree that once prices stabilize we could see further upside, as the global economy starts to digest the recent stimulus, which should lead to inflation down the road. The 2 main questions are how long and windy will that road be and how much inflation will we have? Over the years, one of the main aspects within commodities that has intrigued me is the economics, supply and demand govern the price as opposed to an executive sleeping with his assistant, a missed earnings report or a short seller with an agenda. Yes, just like any market, commodities can be manipulated but to a bigger degree these markets make sense. A hurricane, flood or drought will affect supplies and therefore price. A significant population expansion, a growing middle class with an appetite for better things; i.e. more demand should fuel a commodities bull market for years. It is our viewpoint that we are in the 4th or 5th inning and just taking a rest before the next leg up begins.
To find out exactly how we are positioning our clients in commodity futures and options,
Contact us today at 1-888-920-9997. Don’t forget to tell them The G Manifesto sent you.
Financials
Stocks: Stocks ended the week much better than they stated, clawing back to end modestly lower. The Dow finished the week 55 points or less than 1% lower at 8076 for its first loss in 7 weeks. The S&P traded on both sides of positive and negative but finished the week 3 points lower at 866. For the month of April the S&P is up nearly 9% and on track for its best 2 month run since 75’. The NASDAQ was able to keep its streak alive, ending higher for the seventh consecutive week adding 21 points to 1694. Earnings were largely ignored as were the stress tests, as the market disregarded these tests feeling the gov’t is once again letting banks off the hook. With the results still 1 week away don’t hold your breath for any earth shattering results. The dilemma is that the recent rally was led by financials and with banks on the guillotine we feel it’s unlikely the financials will remain the leaders. We remain cautiously optimistic but if forced to pick a direction we would say down. That is not to say an attempt at 900+ on the S&P is unlikely, we will just be spectators not speculators. Remember the adage “Sell in May and go away.”
Bonds: June 30-yr bonds were lower by just over 1 basis point with the lowest trade since 3/18. Support is seen at 123’00 with resistance at 126’00. The trend remains down but we could see a bounce being prices have come off 7 basis points just in the last 3 ½ weeks. June 10-yr notes were lower by 21.5 ticks last week, like bonds was the lowest price since 3/18. Support comes in between 120’16-120’23 with resistance between 122’05-122’16. The trend remains down but the pace of selling may slow now with the rate back above 3.0%. We are advising clients to continue accumulating shorts in March 10’ Euro-dollar positions. We are approximately in the middle of the trading range we have been in for the last 3 months. The Fed meets this week and we expect no change in policy, at most some jawboning on how to keep longer term rates low.
Softs
July cocoa picked up $58 last week recovering from the previous 2 week’s losses of $383. Support is seen at 2400 with resistance at 2500 followed by 2532, the 20 day moving average. On further weakness in the dollar we may see a short covering bounce being prices are oversold.
July sugar closed up 54 ticks, the highest close in 7 months, helped by higher gasoline prices and what appears to be fund buying. Support comes in between 13.70 and 13.80 with resistance at 14.25 followed by 14.60. We have advised clients to lighten up on longs or at a minimum tighten up stops. Additionally, our clients sold July calls against some of our October call positions.
The US Census Bureau said that cotton mill use increased from an annual rate of 3.09 to 3.14 million bales in March. July cotton closed up 2.10 cents at its highest level since late January. Resistance comes in between 53.50/54 with first support at 51.00 followed by 50.00. We would be a cautious buyer on breaks. We have considered selling July calls against a purchase of October calls; contact us for pricing.
To view our full commentary which includes the sectors of energies, livestock, currencies, financials, grains, softs, and metals, subscribe to our 4 week free trial by visiting this link: http://mbwealth.com/subscribe.html.
_____________________________________________________________________________________Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Before trading MB Wealth recommends that you should carefully consider your financial position to determine if commodity trading is appropriate for you. All funds committed should be purely risk capital. Past performance is no guarantee of future trading results. There are no guarantees of market outcome stated, everything stated above are our opinions. Calculations of profit and loss have not factored in commissions and fees.
When the heavy battering started to buckle the front door of her new home in Tucson, Maria remained frozen to the spot with fear.
As her family scattered to hide in the bedrooms, bathroom and kitchen, masked men toting guns and dressed in flack jackets stormed into the living room shouting “Police! Everyone on the floor!”
Her cheek pressed to the ground, she watched as the men fanned out through the comfortable suburban house, pistol whipping her brother-in-law and shouting, “Where are the guns and the drugs?”
“I raised my head and saw his black boots … It was then I realized they weren’t police at all,” she recalled, speaking on condition of anonymity.
Maria, who has no connection to the criminal underworld, is among scores of law-abiding Tucson residents caught up in a wave of violent so-called home invasions, most of them linked to the lucrative trade in drugs smuggled from Mexico. Maria had bought the house weeks before and the gunmen believed drug traffickers were using it.
The desert city is less than two hour’s drive from the Mexico border. It lies on a crossroads for the multimillion dollar trade in drugs headed north to market across the United States from Mexico, as well as guns and hot money proceeds headed south to the cartels.
Five years ago, police say home invasions were virtually unheard of in Tucson. Now the crimes run at three to four a week, as criminals go after the profits of the illicit trade in marijuana, black-tar heroin, cocaine and methamphetamine through the city.
“We’ve always dealt with those in business establishments, banks and convenience stores, it was very unusual to see them in houses,” Roberto A. Villasenor, Tucson’s assistant chief of police said of the recent trend. “The home was seen as a safe spot.”
CAUGHT UP
Curbing drug violence is a top concern for the government in Mexico, where rival cartels murdered 6,300 people last year as they battled the authorities and each other for control of lucrative smuggling corridors to the United States.
It is also high on the U.S. agenda as authorities seek to stop cartel-related crimes such as kidnappings, home invasions and gangland-style slayings from bleeding over the porous U.S. border and taking hold here.
A year ago, Tucson police department set up a special unit to target the rising number of home invasions. Since then, the officers have investigated at least 173 cases scattered across the city, three-quarters of them tied to the drug trade, investigators say.
The assailants — typically teams of two to six people — frequently dress in tactical gear and identify themselves as police officers, Drug Enforcement Administration agents or SWAT team members as they burst into houses to steal drugs, cash or guns.
“Demographics mean nothing when it comes to home invasions. We see (them) in some of the richest, most wealthy parts of town, and also in some of the most downtrodden, completely poor areas,” said Detective Sergeant David Azuelo, who runs the home invasion unit.
While most raids target the drug trade, some have branched out and gone after students and other law-abiding residents, Azuelo said. Others assault families who just happen to live in a house that was once used to deal drugs, or simply because the attackers got the wrong address.
Michael Porfirio Mason
AKA The Peoples Champ
AKA GFK, Jr.
AKA The Sly, Slick and the Wicked
AKA The Voodoo Child
The Guide to Getting More out of Life
http://www.thegmanifesto.com
