Weekly Commodity Strategy Review

This morning’s unrevised Q4 GDP number at 2.2% on declining corporate profits provides just the right ambiance for a what has been a gloomy week. While we had a completely separate trade looking at multi-year lows in , “Time to Sweeten on Sugar,” most of our focus was on the financial markets.

Several individual markets chipped in to flesh out a big picture in the financial markets that looks turbulent, at best. We started off Monday morning with, “Bottoming Action in the Euro Currency,” for TraderPlanet.

Tuesday, our morning was hijacked by a random interview request by a British lady calling from Las Vegas for a Swiss news channel looking for a soundbite on the Ivory Coast’s cocoa market. Small world.

I think they did a pretty nice job with it. It’s been posted Youtube here – Chaos for Cocoa?

Wednesday morning, we posted the chart below on our twitter feed @waldocktrades prior to the market’s 3% decline.

Sometimes, it really is that simple.
Sometimes, it really is that simple.

We’ve been looking for a stock market correction and believe that the odds are beginning to favor the short side with two out of our last three nice wins coming on the short side.

Update to Wednesday morning's tweet and subsequent 3% decline.
Update to Wednesday morning’s tweet and subsequent 3% decline.

Wednesday afternoon we published, “Copper Traders Concur, Risk Off.” This provided one more piece of the bigger economic puzzle as  commercial copper traders’ reaction to recent economic reports have caused them to abandon the record position they’d been accumulating heading into this spring’s construction season.

Finally, the action in strongly correlated markets heading into 2015’s early FOMC schedule forced me to do some digging. I put together four charts (gold, nasdaq, oil, 10yr notes) that put it out there in black and white, no matter how you slice it, the commercial traders, the one’s who know their markets, have been on the right side of the markets heading into the big meetings. I STRONGLY suggest taking a look at how these markets fit together then, draw your own conclusions about how or, why.

Commercial Traders Ahead of the Fed

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