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Strategies & Market Trends : Classic TA Workplace
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To: AllansAlias who wrote (17384)10/22/2001 4:22:24 AM
From: Joan Osland Graffius  Read Replies (1) of 209892
 
Allan,

Great work.

Your analysis makes sense to me. I am not any expert in this area, but I would assume the COMM group got short the futures to cover their potential losses when they decided to start selling their stock assets. I also believe this group knows what is going on internally in the system relative to demand for the paper assets as they know the supply of capital available to continue the increase and/or cause a decrease in demand for the paper. I believe that they know what amount of capital that it takes to keep the market increasing in price and when the capital is exhausted they know the market must correct. I assume this group had the largest inventory of paper at risk.

Am I close to guessing what goes on?

I do watch some of the grain, corn and soy bean commodities futures since I was born and raised on a farm in North Dakota. They are near and dear to my heart.<g> I also own a few company stocks that should trade closely to these commodities. The same thing seems to happen with these commodity future contracts. The COMM group will be short when they see demand is less than supply. These COMM groups are the people that know what is "really" going on in the system and adjust quickly to cover their potential losses and insure their profits.

Joan
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