Friday, September 5, 2008

Not The End of The World

The markets have been getting the stuffing kicked out of them.

My bet is we are close to a near term bottom, and are overdue for a rally.  Still, not every industry is going to hold onto their gains, so I would not have a great deal of patience with any particular trade.

Oil does not "feel" as heavy to me.  As I look in the commitment of traders report, it looks to me like every speculator with 2 nickels to rub together has fled the country.  Of course, OPEC is the ultimate arbiter with help from the global economy.

Silver looks to be cheap, especially compared to Gold with the Silver/Gold ratio at roughly 66, my bet is Silver is an excellent speculative bet.  Of course, I said that at $15.  Just don't confuse speculating with investing and you will do OK (that means take losses quickly when speculating in commodities).  Keep in mind that Silver has not broken its downward momentum, and I like to buy things that are going up and short things that are going down.  

The Oil "Shoulder Period" has 6 to 8 weeks to go, but that is when Oil is to be bought.  Still, downward momentum has not been broken here, either.  The inventory data and position data support a contention that Oil is bottoming... only for the disciplined, though.

Things change, markets change, data changes... 

Good Luck!

Mentatt (at) yahoo (d0t) com


Bureaucrat said...

How the hell can anything economically recover when no one has any money, the credit cards are all maxed out, and no bank wants to lend except to the best customers?

Greg T. Jeffers said...

Trading in markets (changing your mind) is not like fighting with your spouse. You cannot INSIST that you are right.

Rallys can come at any time, even in a longer term downtrend.

With reports out of a Fannie Mae and Freddie Mac bailout coming SOON, the markets turned around rather briskly. This was most likely short covering, but short covering rallies are among the most powerful, at least in the short term.

That is what this looks like to me.

So "recover" is not the correct word, not that I have a good word to describe it.

Markets change, sometimes overnight. Like today.

You cannot be a trader, and insist that you are right every time.