Weekly Commodity Strategy Review

This was a busy week. We began on Monday with an exclusive follow up on last week’s “Equity Rally Waves a Caution Flag”, for TraderPlanet in, “Commercial Traders Turn Negative Towards Equity Rally” which focused specifically on the Dow.

Tuesday, our attention turned to the unleaded gas market in “COT Sell Signal in Unleaded Futures” for Equities.com. This piece argued that bearish fundamentals would outweigh seasonal strength.

Meanwhile, our main piece for the week focused on, “Copper Traders Bailing Out of Record Position.” Specifically, what was going on with the record commercial net long position in the face of a market that appears to be rolling over.

Finally, the equity curve for our commercial live cattle trading program has been updated to show its recent success.

Copper Traders Bailing Out of Record Position

The copper market is frequently referred to as the, “economist of the metals markets” because the supply and demand issues associated with this market lead directly to construction and manufacturing. Therefore, commercial long hedgers actively locking in prices for their future usage is seen as a bullish sign for the economy because construction and manufacturing managers are trying to lock in their production supplies for an expected growth in demand. Obviously, commercial long hedgers setting a record net long position would be indicative of Continue reading Copper Traders Bailing Out of Record Position

Commercial Live Cattle Program

Our Commitment of Traders live cattle trading program continues to excel having won 5 out of its last 7 trades. Furthermore, it looks like the current trade could be another big winner!

This is one of 33 completely mechanical programs whose instructions we deliver by email, nightly.

030315 comm long live cattle
Recent performance of mechanical live cattle trading system based on following the commercial long hedgers’ actions in the futures market.

Once registered, you have access to all 33 which can be combined as you choose on our site to compile an equity curve that meets your trading needs.

See Mechanical COT Programs.

COT Sell Signal in Unleaded Futures

We discussed the growing imbalance in the unleaded gasoline market last week here at Equities.com. Our primary focus was based on two points. First, the fundamentals in the petroleum¬† sector are bearish. Secondly, the commercial traders as a group have now turned negative on their own product at these prices. These two factors have grown in strength over the last week and Monday’s weakness finally triggered an official COT Sell signal.

Continue reading COT Sell Signal in Unleaded Futures

Weekly Commodity Strategy Review

Most of the trading we do is based on some form of mean reversion. The idea is that a market that has moved too far away from its predicted value area is apt to return. This is the equivalent of buying low and selling high in a sideways market. The primary difference in our methodology is that we use the commercial traders within their respective markets to provide us with the two necessary keys required to make this work.

Continue reading Weekly Commodity Strategy Review

Equity Rally Waves a Caution Flag

The equity markets have been THE place to be for capital appreciation over the last few years. Last year saw the Dow Jones under perform with a 9.6% return compared to the S&P 500 at 13% and the Nasdaq 100 at a whopping 19%. In spite of the impressive returns provided by the stock index futures last year, there were still periods of flatness and even outright declines. In fact, the Nasdaq had a decline of more than 10% from peak to trough at one point last year, in spite of its 19% return for the calendar year. This week, we’ll discuss a method of applying the commercial traders data from the weekly CFTC Commitment of Traders reports to the equity markets in an attempt to preserve profits gained on the long side of the markets as well as profiting from forecasted declines.

Continue reading Equity Rally Waves a Caution Flag

Bucking the Seasonal Gasoline Trend

Moore Research is the virtual leader in seasonal commodity analysis. Their research shows that 14 out of the last 15 years that May unleaded gasoline futures have rallied between early February and early March. One of the primary reasons for this rally is the beginning of the shift away from winter gasoline blends and the production of summer blends heading into the Memorial Day party time. Their research is based on statistical analysis that describes what, “normal” seasonal market behavior is. However, there is a considerable case to be made that the current situation in the energy complex is anything but, “normal.”

Continue reading Bucking the Seasonal Gasoline Trend

Commodity Futures Trading