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Strategies & Market Trends : Classic TA Workplace

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To: reaper who wrote (51921)8/30/2002 1:31:09 PM
From: Joan Osland Graffius  Read Replies (1) of 209892
 
reaper,

In general the commodities have been in a bear market for a long time. During these long bear markets production is taken off line slowly as producers must make profits and the weak producers go out of business. When we have economic down turns after long bear markets the production cut backs accelerate and the producers through this process set up a deficiency in supply as they overshoot squeezing the supply chain. As you noted we are having some weather affects with some commodities but these things occur no mater what the market bear or bull. IMO, in the long run these production cut backs will cause increasing prices and a bull market in commodities. I think this can occur even if we encounter a world wide depression as commodities do not have to experience demand increases as the producers will keep the supply in check.

BWDIK,

Joan
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