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What Goes Around Comes Around
A Reflection 1998-2000
"Among the hazards of speculation the happening of the unexpected -I might even say the unexpectable - ranks high. There are certain chances that the most prudent man is justified in taking - chances that he must take if he wishes to be more than a mercantile mollusk--" Reminiscences of a Stock Operator.
I want to reflect and predict about some markets in general. Two Years ago I issued a Special Report in August of 1998 , go to http://www.futurescom.com/sr8138.htm to read what I specifically said at that time…
Aug 1998 …“ as traders we should be 'looking into the future with an imagination...perceiving what might happen and taking action.. This was a lesson taught to me by a friend Bob Rowland.. now retired from the business but in his life (as told to me)traded over 10 million silver contracts and experienced the heydays of the beans in the 60's 70's and the bellies from day one. Bob used to hang out and trade with some of the great ones many years ago.. and it was my privilege to learn all I could from the years we worked together “ Take my advice and take a step back some time and look beyond the Noise to see what's really happening ...For instance , take a look a the Nikkei, it is still marginally near or above last years end of year price region., while the US Small caps are below last years end of year prices and the Big stocks are getting dangerously close to the last years end o year prices. Now think for a minute. We are the strong ones and they are the weak. But has it really changed this year ? Not much.. My belief is that over the next few years the Japanese and Asia will gain on the US...as the US gained on the Japanese over the last ten years. If you think the Asians are going to lie down and die and only then recover by doing what the US tells them to, you are in my opinion very wrong. In fact I believe their improvement will become our loss down the road....just as our improvement was their loss over the last ten years. What should traders do ? …the recent events that occupy the 'talking heads'. The Japanese weakness , the Russian problems are a result of things that have been building for a long time .In my opinion ..the climax is taking place as we speak. how long will it last it ? I don't know , but my opinion is that we are nearing the end ..So as A Traders I have no interest in Selling Japan. Period”.-- 1998
Since then ,
The Nikkei Simex Spot bottomed in October of 1998 under 13,000 and managed to reach up over 20,000 earlier this year a 60 % increase before it’s decline this Spring…During the same time frame the SP500 gained about 50 % All the while the Yen spot was near 6800 to 6900 bottomed soon after the report and is now near 9300 , about a 35 % gain against the US Dollar since 1998…
What now ? I remain Friendly to Yen and would suggest traders begin poking at the long side of the Nikkei from these levels.. What about he Euro Currency ? Stay Tuned for a Special Situation Report soon to be released !!
Next the oil markets, let's clear the air Again this time at the other end of the spectrum
Aug 1998- “Why the heck would I want to sell Oil short at these prices ?
here is only so much oil in the ground and the last time prices were at these levels historically they gave way to price increases.? I will continually look to buy break until the sellers sell all they can and can't buy it back down the road. You know the old saying. Buy when the Blood Runs. “ -
Aug of 1998 Spot Crude Light was in the ‘News’ near 13.00 a barrel , bottomed near 10.50 in Dec of 1998 and is now in the News again and trading near 36.00 a barrel….
Over the last Week , the Crude mkts. have been gyrating like a Yo Yo, beginning with the OPEC Announcement of an increase in output , which resulted in a brief move downward follow by a rapid ascent basis Nov to near the previous weeks highs in one day, attributed to a real increase under the stated one cause of current output not yet reported, then it dropped again for a couple days before surging on Friday , on threats of Military action by the US against Iraq unless Iraq stops threatening Kuwait who they feel is stealing oil from their southern fields…The Us has periodically bombed Iraq since the War’s end .. This is no Surprise and in my opinion was only part of the reason for Friday’s surge in Oil prices.. In my estimation , the rally was more a result of Weather than War mongering!!.. A tropical depression forming off the Yucatan was at first predicted by weathermen to turn into a tropical storm and then a hurricane and head into the Gulf
of Mexico. At this writing the projected track of the Storm is now North East into Florida’s West Coast rather than the Texas Gulf….., Bob used to say weather mkts. in the end should be sold …
Here we are Two Years later and all who were short are now long …
There is another other old saying , when the Crowd is long it’s usually Wrong…,
Technically speaking the Crude mkt is in Great Shape, however I Feel it’s a bit over bought
and I have no desire to Buy Crude at these prices and will continually look for Spots to short it !!
As for the Grain mkts, Two Years ago, I Felt we had 50 cents Downside potential in Beans, Corn and Wheat… and did not want to short.. Corn was near 185 in August of 1998 and has been trading between 180 and 240 for the past two years, no change there
Wheat was near 260 a bushel , with the low end near 225 and the high end near 3.00 .. again no change and I would rather maintain longs and buy dips for an eventual move higher ..
Soybeans however were near 560 and have gone as high as 595 and as low as 410 ish on the front end last summer.. I was wrong !! but Still Remain a buyer rather than a seller for now…
On to the metals Spot Month gold was near 283 in Aug 1998 when I felt a downside potential was 10 % for the long term , the low was 253 ish in Sept 1999 , or around 10 % decline from Aug 1998 , however the highs a month later in October of 1999 was near 355 almost a 40 % increase
before falling apart again…. No change there , I would rather be long than short..
Ditto for silver which was near 515 Aug of 98 and traded just under 460 , 10 percent Down and as high as 580 for the past two years.. just over 10 percent up ..
Copper was near 72 cents went as low as 61 cents briefly or a 15 % decline and is now near 93 cents over 28 % increase since then…However at these levels we fell copper may set back a bit an would rather be a sellers than a buyer until the mkt tells us otherwise.. Stay tuned …
The Surprise in the Metals has been Platinum , which in Aug of 1998 was near 370 traded down to 350 to 320 briefly a 10 to 15 % max downside , and is now near 585 to 605 about a 60 %
increase, and in my opinion heading towards and eventual touch of 720 ish……
Well I think that this enough for now...traders should stay tuned, vacations are over . I invite you to call my office if you would like more ideas or wish to develop a plan suited to you needs .. In any event stay in touch the rest of this year and into the end of Year 2001 should be as interesting as the Mid 1998 to Current time frame has been considering , the total Value of FuturesCom’s programs was near $ 156,000 in Feb of 1998 and is now over a 1.25 Million..
Specific trades will be sent via Special reports, Bi -Weekly Outlooks, Flashes.
Morning Comments will attend to the next days trading.. So Have Fun and Enjoy!
Oh one more thing , the US Stock mkt, not really addressed on it’s own then, but rather as a comparison of the General mkt to Japan and Asia. Has been specifically addressed in the past through various Special Reports and recommendations which can be found on our website.
Recently on July 28, 2000 I issued a Special Stock Market Report and expect to update that a bit shortly.
A ship in Harbor is Safe.. But that's not what ships are built for.
Happy Trading !
THIS PUBLICATION CONTAINS THE VIEW AND OPINIONS OF THE AUTHOR, EXCEPT WHERE OPINIONS ARE ATTRIBUTED TO OTHER SOURCES. WRITTEN PERMISSION IS. REQUIRED PRIOR TO ANY DISTRIBUTION OR REPRODUCTION. FUTURES TRADING IS RISKY AND CAN CAUSE SUBSTANTIAL FINANCIAL LOSS. THE USE OF OPTIONS AND OPTION TRADING INVOLVES A HIGH DEGREE OF RISK. THE USE OF STOPS MAY NOT LIMIT LOSSES TO INTENDED AMOUNTS. SPREAD POSITIONS MAY NOT BE LESS RISKY THAN OUTRIGHT FUTURES POSITIONS. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. SOURCES ARE BELIEVED TO BE RELIABLE BUT NO ASSURANCE IS MADE FOR ACCURACY. ADDITIONAL RISK DISCLOSURE IS AVAILABLE.
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