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It's late...This is unedited...Excuse any errors...
April 19, 2009
I will be out of the office for the entire coming week (April 20-25) visiting New England to help my elder son decide where he'll be attending college next year (Princeton or Yale). As usual, Rick Sitten, Tom Stafford and Willie Adams at Benchmark will be covering for me while I'm away. I assure you they are all jaded old commodity hacks like myself and can handle anything related to commodities or your ADM account. If you dial either of my regular numbers (866-578-1001 or 770-425-7241), my calls will be forwarded straight through to them...Otherwise, their direct lines are 800-273-0269 and 770-454-1880.
I WILL be watching the markets and will be available via my cell if you want to catch up with me personally...There will obviously be times when you'll only be able to leave a message but I will most likely get back to you very shortly thereafter. My cell phone is 770-366-3070.
I had very much wanted to get a newsletter out before leaving but various children related events kind of made that difficult to accomplish (sometimes it seems I have no life of my own) but I did decide to throw down some quick, briefly stated, but very firm ideas before hitting the sack tonight.
Here goes....VERY briefly...
My professed downside target of 6500 on the Dow seems to have been magical. We hit 6496 on March 6th and are now 1700 points off that low. I promise you, this was nothing more than a lucky guess and am certain I don't know any more about where any the markets are headed than my dog does...If I did really know, I wouldn't have been sitting on a lot of Soybean Oil and Cattle options for the past 4-5 months as both of those markets have gone dead sideways, which for an options buyer like myself, is deadly for account values.
Nevertheless, part of my job is to keeping making semi-educated half assed guesses so I will keep doing so...
I believe the stock market rally has surge-by-200-point-surge slowly convinced everyone the worst is over...A note to myself from late Friday said: "Beware! For the average guy, who was absolutely PETRIFIED 5-6 weeks ago, it finally feels easy to buy whatever it is you like right now. The rally has relaxed everybody."...While I do sense all the virtually worldwide government stimuli will have the intended effects, and I do sense that some businesses sectors have seen the worst, this still does NOT mean the stock market has to go up. In my opinion, equities are still just a big game with all the various factors (PE's for example) that supposedly determine what price a stock should trade at being nothing more than a bunch of gobbledygook...and for various reasons, which I'll omit in the interest of brevity tonight, I kind of think stocks are going to be very short term trading affair for a long matter how good the economy happens to be... and the only money anybody will make in equities (other than Wall Streeters) will be in buying and selling semi-frequently, which I can promise you is a tough, tough, practically impossible game to play...
My bottom line stupid guess from here is stocks could easily end up making new lows again...maybe not going anywhere beyond that...with the next big (and maybe last) negative catalyst being more and more bad news about the commercial real estate market.
There is more and more talk that commodity prices have great upside potential due to, lately, that same old dead horse from last year, "demand from China". Maybe I'm dead wrong but I still think the majority of commodity markets are still priced according to the bubblish way the world was flying 12-18 months ago and are therefore still a relatively long way from their lows. I STILL want to be short a number of markets and see the recent rallies as tremendous opportunities to establish new shorts. It's late and my flight is early tomorrow so all I'm going to say here is SELL THE SOYBEAN COMPLEX NOW AND DO THE SAME WITH CATTLE.
I also think Gold will end up under $500 and ounce within the next 12-18 months.
I also can tell you that seemingly 98 out of every 100 commodity experts is calling the bond market a major sale. My own very strong opinion is Treasury Bonds have not yet made their highs...that long term yields have therefore not reached their lows...and I am again very much a Treasury Bond buyer...I could easily punch out 10 pages as to why but this will have to wait until I return from up north.
Here are a few charts...I think the Soybean and Cattle Complexes should be shorted immediately.
Call me if you are interested...I'll be on the road but I will be hooked in to the markets.
cell 770-366-3070
This $10.50 area is a great place to see them start failing....


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