<your view?>
We are in a 6-month commodity correction, except energy. The coming bounce will cause further confusion. The Fed is taking away the punch bowl from our 4-year party.
I have long positions aligned with what I see as a secular commodity bull and I have trimmed those positions going into this correction, but I am not a multi-billion dollar hedge fund so when those guys are covering USD shorts or selling physical copper into a price spike for example, I feel I can play the ST move also. Some of this is tax-motivated, otherwise one would trade the entire position all the time.
Lets see what others say:
Now the euphoria that made commodities unbeatable is giving way to anxiety. ``Signs of psychological excess are building,'' said Stephen Roach, the chief economist at Morgan Stanley, in a memo to customers of the world's second-largest securities firm on the day of the market's mid-May debacle. The ``blow-out can only end badly.''
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``As an investor, you may be better off taking some chips off the table right here,'' the 60-year-old Faber said in a telephone interview from New York. ``We will have a very serious correction in commodities, and then we'll have to reassess.''
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The commodities markets are ``extremely overvalued and very vulnerable to a substantial drop,'' said Robert Prechter, chief executive officer and president of Elliott Wave International Inc. in Gainesville, Georgia, a firm that makes forecasts based on price charts. ``Usually within a single week or a month, they will go up a lot and down a lot at the same time, that is what's most likely for copper,'' Prechter said in a telephone interview.
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To be sure, some of the market's most influential bulls aren't giving up. Rogers, co-founder of the Quantum Fund with George Soros and author of the 2004 business bestseller ``Hot Commodities,'' predicts the boom in raw material prices will continue.
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``This is a secular bull market which has another 15 years to run because supply and demand are out of whack,'' he said after the tailspin last week. ``There's an excess of dollars in the world and the dollar should be sold. There's a shortage of commodities in the world and commodities should be bought.'' Gold and copper will keep climbing and agricultural commodities may be the best bet, the 63-year-old Rogers now insists.
So....Confused yet?-D |
