The G Manifesto

Commodity Trading: Investors must exercise patience

For April 13th– April 17th 2009
By: Matthew Bradbard

Buy The Little Book of Bull Moves in Bear Markets: How to Keep Your Portfolio Up When the Market is Down by Peter Schiff

Click Here for Pit Bull: Lessons from Wall Street’s Champion Day Trader

The word is China’s economic recovery will begin later this year and pick up into 2010. This may be true but what about conditions in the US, Europe, India and emerging markets? We are starting to see some light domestically but have things really gotten considerably better? The difficulty is I still think there is much more pain to come and I’m not ready to go all in just yet. That seems to be the case with many with the record amount of monies on the sidelines. Until real estate bottoms, the employment situation gets better and the banks really start lending, there is no reason to celebrate. I suggest investors use the most recent move in equities to lessen their exposure and not buy into the fact that commodities are going to continue higher at their current pace. Take advantage of the large swings and diversify your portfolio. Be patient as it may well take years to get back to normal market conditions.

Livestock

The USDA increased its estimate of 09’ beef production to 26.44 billion pounds, down slightly from 08’ production levels. The 09’ average price estimate for choice steers was kept unchanged at 86.5 cents/lb. June live cattle closed up 1/3 cent, the highest close in 8 weeks filling a gap from 2/13. Resistance is seen at 85.50 followed by 86.30 with support at 84.25 followed by 83.75. We would be a buyer on a setback with stops below the 20 day moving average which is at 83.00. May feeder cattle were higher by 2.175 cents, the highest close since 2/10. Prices have now gained 6% in the last 2 weeks. Support is seen at 98.40 followed by 97.10 with resistance at 99.50. The last time prices were over $1 was 1/6, will that happen this week?

Buy The Little Book of Bull Moves in Bear Markets: How to Keep Your Portfolio Up When the Market is Down by Peter Schiff

Click Here for Pit Bull: Lessons from Wall Street’s Champion Day Trader

The USDA reduced its estimate of 09’ pork production to 22.775 billion pounds, down 2% from 08’ production levels. The 09’ average price estimate for barrows and gilts was increased from 46.5 to 47.0 cents/lb (63.5 cents lean). June hogs were up .625 at 74.27 closing back above the 20 day moving average.

Resistance is at 74.60 then 76.00 with support at the 20 day moving average and then 72.70. We are positioned long with clients, purchasing call spreads, selling puts and long futures with a target of 77.50/78.00.

Financials

Stocks: Stock markets defy logic again trading higher but will that last as earnings start to trickle in? The S&P 500 picked up 12.50 points last week to trade at its highest level since 2/10 gaining 1.5%. This was in large part to upbeat news on some financials, namely Wells Fargo’s optimistic views and revisions to the uptick rule. Resistance comes in between 865 and 870 with support at 825 followed by 800. The Dow was higher by 38 points to gain .05% on the week, but navigating these waters could be tense being the Dow had a 400 + point range in a shortened trading week. Resistance comes in at 8060/8080 followed by 8250 with support at 7840/7880 followed by 7575. We expect 7400/8100 range and for prices not to wander too far from those parameters in the next few weeks. The NASDAQ was higher by 20.50 or 1.5% to its highest price this year. The NASDAQ has been positive now for the last 5 weeks gaining 25% in that time. Resistance comes in at 1375 with support at 1290.

Continue Reading about the Financials and Softs

Click Here for Pit Bull: Lessons from Wall Street’s Champion Day Trader

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.

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. Don’t forget to tell them The G Manifesto sent you.

_____________________________________________________________________________________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.

Peter Schiff: Be Careful What You Wish For

Buy Crash Proof: How to Profit From the Coming Economic Collapse by Peter Schiff

Buy The Little Book of Bull Moves in Bear Markets: How to Keep Your Portfolio Up When the Market is Down by Peter Schiff

Click Here for Pit Bull: Lessons from Wall Street’s Champion Day Trader

“Apart from the obvious financial distress that the current economic crisis has inflicted on most Americans, perhaps one of the more irksome byproducts of the meltdown has been the inescapability of clueless economic blather. It’s bad enough when so-called economists serve up the same Keynesian nonsense that has led us down the current cul-de-sac in the first place. At least those people have some incidental knowledge, however deeply flawed, of basic economic concepts. It’s far worse when political pundits, whose understanding of economics typically comes from Treasury Department talking points, hold forth as if they really know what is going on.

Last weekend I happened to watch the McLaughlin Group, a mainstay of Sunday morning political programs, which included a discussion that typified the lack of economic common sense that is so pervasive in our country. The program’s anchor John McLaughlin, undoubtedly an expert in political maneuvering and Washington horse-trading, offered viewers his assessment of the global economic landscape. McLaughlin identified China, Germany, and Japan as being prime offenders in the global economic meltdown. Their “offense” was that they ran persistent trade surpluses, had savings rates that were “far too high” and consumption rates that were “far too low”. McLaughlin identified these sins as responsible for the global economic imbalances. He urged the governments of those countries to adopt policies that would encourage their consumers to borrow and spend more. Exactly which school of economic thought informed his assessment is not entirely clear.

Buy Crash Proof: How to Profit From the Coming Economic Collapse by Peter Schiff

Click Here for Pit Bull: Lessons from Wall Street’s Champion Day Trader

In the first place, if the creditor nations of the world actually follow Mr. McLaughlin’s advice and become borrowers themselves, from just where does Mr. McLaughlin believe the money will come? These countries already lend to America. Does he think that they also have enough leftover to lend to themselves? Does he believe that America, which is tens of trillions of dollars in debt, has enough excess savings to lend? Perhaps he’s eyeing the Martians’ accumulated savings? The point is: the entire world cannot borrow at the same time. Someone has to do the lending. The only reason Americans are able to borrow so much is that those “offending nations” are loaning us the money.

Mr. McLaughlin apparently believes that if those countries simply adopted policies to encourage more consumption, America would then be able to export more products. Just what American-made products does he expect the Chinese to buy? If China did spend more, which they ultimately will, they would simply buy more of their own products that they currently ship to us. After all, if Americans are not buying American-made products, why would the Chinese? In most cases, it’s not that consumers do not want to buy American products it’s just that there are so few American-made products that are competitive in the global marketplace.

JadaKiss “Can’t Stop Me” (OFFICIAL VIDEO) [HD]

One guest on the panel did try to correct Mr. McLaughlin by suggesting that Americans needed to save more and spend less, but he was quickly shot down. Why should we spend less, McLaughlin snapped, when they could shoulder some of the burden by spending more? The inference here is that we are doing our part by lugging home shopping carts full of consumer goods, while they are getting off easy by spending their days in muggy factories making the goods!

What he fails to understand is that nothing can be bought that is not first produced. We cannot all just decide to spend our troubles away. It is only because the “offending nations” are producing surplus goods (meaning more goods than they are themselves consuming) that those goods are available to Americans. In McLaughlin’s America, and indeed Obama’s, we would all be standing around empty shelves with wheelbarrows full of worthless cash.

If the creditor countries are indeed the offenders, it is only in the sense that they have enabled us to live beyond our means and have facilitated the growth of our phony economy. However if they do as Mr. McLaughlin suggests, the immediate impact on the American economy will be much different than what he expects: the dollar will collapse, both consumer prices and interest rates will rise sharply, and the current recession will deepen. Rather than holding us back, foreign creditors have actually been propping us up. As for Mr. McLaughlin, he should stick to his strong suit: the dissection of political posturing. To presume a level of economic understanding by listening to self-interested politicians and academics is to invite catastrophe.”

Source

http://www.europac.net

Peter Schiff breaks it down again.

At this stage in The Game, the only worthwhile “product” that the USA exports these days is International Playboys on The Rise, like your humble author.

The Rest is Up to You…

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

Jadakiss – Cant Stop Me (Green Lantern Mix) (Kiss My Ass Mixtape)

Commodity Trading: Commitment of Traders (COT) – Who, What, Why and When

Click Here for Pit Bull: Lessons from Wall Street’s Champion Day Trader

April 8, 2009
By: Matthew Bradbard

(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.)

MB Wealth Corp. is not responsible and does not endorse anything outside of the content of this article authored by Matthew Bradbard; President of MB Wealth.

Click Here for More Commodity Trading Information by MB Wealth

In the last few weeks I have received several inquiries from existing and prospective clients. They are curious to know if I look at the commitment of traders (COT) report and if I view it as a useful resource for commodities trading. The answers are yes and yes. There are so many useless reports that are issued, however the COT is an excellent source of information. I have chosen to write a brief explanation hoping that some of the questions these individuals had may be answered. As well if there is a topic in commodities that you are having trouble grasping, we take suggestions into account when choosing our topics.

The Commitments of Traders (COT) report provides a breakdown of open interest for commodity markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC.

Reports are available in both a short and long format. The short report shows open interest separately by reportable and non-reportable positions. For reportable positions, additional data is provided for commercial and non-commercial holdings, spreading, changes from the previous report, and percentage of open interest by category, and number of traders. The long report, in addition to the information in the short report, groups the data by crop year, where appropriate, and shows the concentration of positions held by the largest 4 and 8 traders. The supplemental reports show aggregate futures and options positions of non-commercial, commercial, and index traders in 12 selected agricultural commodities.

The COT needs to be inspected every week, but traders need to be careful not to read too much into the numbers or over analyze. This report essentially tells traders how others are positioned and the why is left to interpretation. It’s good to know what everyone else is trading in the markets. It’s kind of like sitting at the casino and every time, just before it’s your turn, the other players have to turn and show you their hand. Given that information do you think you would be a better poker player? Sure, you may not know what the deck holds, how many decks are in the shoe or what the other players are going to do on their turn, but at least you have an idea of what hand they hold. The COT provides useful information to traders and can be valuable, helping to formulate a successful trading plan. Recognize the COT is worth taking a look at every week, but that‘s not to say that valuable information will be in the report. See below an explanation on the COT.

Making sense of the COT:

Commercial – Describes an entity involved in the production, processing, or merchandising of a commodity, using futures contracts primarily for hedging.

Concentration Ratios (long form only) – The report shows the percents of open interest held by the largest 4 and 8 reportable traders, without regard to whether they are classified as commercial or non-commercial. The concentration ratios are shown with trader positions computed on a gross long and gross short basis and on a net long or net short basis.

Long report – Includes all of the information on the short report, along with the concentration of positions held by the largest traders.

Non-commercial (speculators) – Traders, such as individual traders, hedge funds & large institutions, who use futures market for speculative purposes and meet the reportable requirements set forth by the CFTC.

Non-reportable positions – The long and short open interest shown as “non-reportable positions” is derived by subtracting total long and short “reportable positions” from the total open interest.

Number of Traders – To determine the total number of reportable traders in a market, a trader is counted only once whether or not the trader appears in more than one category (non-commercial traders may be long or short only and may be spreading, commercial traders may be long and short). To determine the number of traders in each category however, a trader is counted in each category in which the trader holds a position. Therefore, the sum of the number of traders in each category will often exceed the number of traders in that market.

Open interest – Open interest is the total of all futures and/or option contracts entered into and not yet offset by a transaction, by delivery, by exercise, etc. The aggregate of all long open interest is equal to the aggregate of all short open interest.

Percent of Open Interest – Percentages are calculated against the total open interest for the futures only report and against the total futures equivalent open interest for the options and futures combined report.

Reportable positions – The futures and option positions that are held above specific reporting levels set by CFTC regulations.

Short Report – Shows open interest separately by reportable & non-reportable positions.

Spreading – For the futures only report, spreading measures the extent to which each non-commercial trader holds equal long and short futures positions. For the options and futures combined report, spreading measures the extent to which each non-commercial trader holds equal combined long and combined short positions.

Supplemental Report – Based on the information contained in the report of futures and options combined in the short format, the supplemental report shows an additional category of “Index traders”. These traders are drawn from the non-commercial and commercial categories. The noncommercial category includes positions of managed funds, pension funds, and other investors that are generally seeking exposure to a broad index of commodity prices as an asset class in an unleveraged and passively managed manner. The commercial category includes positions for entities whose trading predominantly reflects hedging of otc transactions involving commodity indices; for example, a swap dealer holding long futures positions to hedge a short commodity index exposure opposite institutional traders, such as pension funds.

Using the COT for trade purposes:

You may or may not have heard about the COT report; it has been around for many years. This report should be used as a tool and implemented into your trading strategy but by no means should the COT be the only resource traders use to make trading decisions. Once in a while when categories get to extremes the COT may aid in your decisions.

The basic significance of the COT is that it provides a line up of who the players are in the futures game: commercials, large speculators, and small speculators. It also shows what position they have (buying or selling).

I believe, with some experience, the COT can be used by the individual trader. The key is to see if anything jumps out as an abnormality. Keep it simple and apply the statistics for what they are, nothing more nothing less. Look for a significant increase/decrease in open interest. Compare analyses with the individual charts of the commodities and see if they are telling the same story. What if anything does a change in open interest or volume tell you? What is the overall trend in the underlying commodity? Is there a seasonal tendency or any historical data that indicates an impending move?

The main thing I want traders to take away from this is they generally want to be positioned on the same side as the “big boys” that have the ability to move the market and ride their coattails. Commodity traders that invest and trade side by side with the largest commercial interests in the world, in my opinion, increase the odds of being successful. That is not to say that trading against the commercials or having a contrary opinion is not sometimes prudent because swimming against the tide can often work but generally the reality is that when sitting at the table the man with the deepest pockets usually wins. There is no secret path to riches in commodities or any market for that matter but the COT should help in making sense of commodities trading and assist in answering the who, what, why and when.

Click Here for Pit Bull: Lessons from Wall Street’s Champion Day Trader

Click Here for More Commodity Trading Information by MB Wealth

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.

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. Don’t forget to tell them The G Manifesto sent you.

________________________________________________________________________________________________________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.

George Soros: The Crash of 2008 and What it Means

Click Here for The Crash of 2008 and What it Means: The New Paradigm for Financial Markets

The real danger of collapse has passed,” says legendary financier George Soros. But the “fallout of the collapse” of the banking system “will linger.”

In the wake of Lehman Brothers’ bankruptcy on Sept. 15, 2008, authorities were forced to put the financial system remains on “artificial life support, which is where it is now,” says Soros, the chairman of Soros Fund Management and author of several books, including most recently The Crash of 2008 and What It Means.

As a result, the billionaire speculator says the stock market’s recent rally is doomed to fail. “Now we will face reality,” he says, referring to a belief policymakers “did not succeed in recapitalizing the banks to the point where they can lend freely.” He added, “talk of zombie banks – unfortunately that’s where we are now,” Soros says. “Instead of providing lifeblood of credit, [banks] are effectively drawing the lifeblood of activity of profit to themselves.”

Click Here for The Crash of 2008 and What it Means: The New Paradigm for Financial Markets

That, in turn, will keep the economy from producing anything more than a fleeting bounce for the foreseeable future, says Soros.

Soros: “Danger of Collapse Has Passed,” But Stock Rally Not Sustainable

Click Here for The Crash of 2008 and What it Means: The New Paradigm for Financial Markets

Soros: Dollar’s Strength a Measure of System’s “Sickness”; Euro Will Remain Viable

Soros Says Fed in a Bind: Beware Stagflation, Bursting of Bond Bubble

Click Here for The Crash of 2008 and What it Means: The New Paradigm for Financial Markets

The Rest is Up to You…

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

Papoose – Graffiti [21 Gun Salute]

Commodity Trading: “Half empty or Half full?”

For April 6th– April 10th 2009
By: Matthew Bradbard
http://www.mbwealth.com

Click Here for Pit Bull: Lessons from Wall Street’s Champion Day Trader

As G-20 leaders met last week to deal with the global crises there seems to be a growing sense that the worst of the financial crisis may have past. We couldn’t disagree more and think there are still rough times ahead. The FASB approved a change in accounting standards that gives banks more flexibility in how they value distressed assets. Some say the new rule will increase bank profits by as much as 20% and will apply to most companies in Q1, but it may just be another cute way to cook the books. It is naïve to think that because these toxic assets aren’t on the books that they just vanish into thin air. Until we flush the system and world leaders recognize that this problem, which took years to develop may take years to work out, we will continue to live in fantasy land. I’m not a pessimist or an optimist, I’m a realist. That being said there will be plenty of opportunities to profit and we will seek to identify them for our clients.

Energies

The US Department of Energy said crude oil supplies were up 2.8 million barrels last week, supplies of gasoline were up 2.2 million barrels while heating oil supplies were up 300,000 barrels. May crude oil closed up 26 cents on the week, but that alone doesn’t say a great deal being prices had a $6.64 trading range. Crude oil has now moved higher for 7 consecutive weeks and I still find myself trying to convince investors that an interim bottom was made. Support is seen at the 20 day moving average at 50.20 with resistance at the high from 3/26 at 54.66. May heating oil was lower last week by just over 1 penny. Support comes in at the 20 day moving average at 1.3475 with resistance between 1.5125 and 1.5175. Heating oil should continue to follow the direction of crude, we have no trading suggestions currently. Some clients have expressed interest in getting long RBOB and short heating oil but we have yet to commit funds. May RBOB was higher by 65 ticks last week, after an early week slump prices surged 15 cents/gallon. Support comes in between 1.3550 and 1.3600 with resistance at 1.5500. Continue to use dips such as we saw last week to become a buyer of 20 cent call spreads for July and August.

The US Department of Energy said underground supplies of natural gas were unchanged last week at 1.654 trillion cubic feet. Supplies are now up 32% from a year ago. May natural gas closed up 4 cents but prices still remain under $4.00. For the week prices consolidated in a 30 cent range and if I didn’t know better formed a base for a move higher. If the lows hold at 3.60 we should see a trade back up, resistance at the 20 day moving average this week at 3.98. On a move through that level we anticipate a move to 4.50 and potentially 5.00 in coming weeks.

Currencies

The ECB reduced interest rates last week from 1.50% to a record low 1.25% but not the 1.0% that the market had priced in so the market rallied with June gaining 258 ticks. Support comes in at 1.3270 with resistance at 1.3725. We could see some follow thru higher this week, but we would still be looking to sell rallies anticipating a move back below 1.30. We would however caution to wait for a sell signal as opposed to just jumping in.

The BOJ’s Tankan survey of business sentiment fell from -24 to a new record low of -58 in the Q1of 09’ the sixth consecutive quarter of decline. The June yen was lower by 233 ticks last week to its lowest levels since 10/21. Prices have given back 700 points in the last 2 weeks with a close back below par. Support is seen at .9925 with resistance at par followed by 1.0200. We advise the sidelines. The BOJ is expected to leave rates at 0.10% this week.

The Aussie was higher by 267 ticks last week but after a 9 cent advance in the last 4 weeks this market may be ready to take a breath. Support is seen at .6925 with resistance between .7200 and .7225. Look for the RBA to cut rates 50 basis points to 2.75%.

Continue Reading about Currencies and Grains

Click Here for Pit Bull: Lessons from Wall Street’s Champion Day Trader

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.

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. Don’t forget to tell them The G Manifesto sent you.

_____________________________________________________________________________________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.