Hi John,
Sugar has rallied 13 % or more in the past 2 days and all the softs are rallying.
Yeah... I saw that... I was tempted to buy on monday, but I didn't pull the trigger. I don't trade sugar that much.... but have been casually following it. Scott (SE) aptly pointed out to me a few weeks ago that sugar is a low risk position trade at these levels.
I think the 20 year low in sugar is 2.50 or so. Although.... what I wonder about is where the lows of a few days ago are, adjusted for inflation. we may well be near historical lows.... of say the last 100 years. <g>
Defrocked mentioned this to me today: Sugar
has historically been a coincident indicator of
increasing global real incomes. Recent commodity
movements have been suggesting a basing and upward
bias and that the real global economy is no longer
on a precipice.
sounds fair to me. The thing to remember about inflation, imo.... is that it really isn't here yet in a lot of areas. Moreover, I think it will take a while for the #'s to bear it out, due to their slow reaction time. What I mean is: most commodity markets recently have, or are currently ending protracted bear markets. While I think the case can be made that some of the longer term cycles are ushering in important lows.... that does not necessarily mean advances will begin in all markets right away, although they will in some (as with oil). Other cycles, have to get in synch, imo, before a big advance can occur... of course, WDIK. In some markets -due to their nature- there will be a longer basing/accumulation period.... or rather, phase I of whatever is coming. Consequently, I think the next half of the year will foster more persistent trends in some commodities... but that probably won't represent a real breakout (longer term) since we are rallying from such oversold levels. I think a good precedent for the grains -right now, in this respect, is 1939 and 1969. Using soybeans as the example... beans made important lows in both 39-40 and 69... and although they advanced off of those lows.... the ROC of the advance did not accelerate until a year or so down the road in 40, and 70, respectively -a long term breakout obvious to anyone willing to look. Similarly, although the seeds have been planted for whatever commodity rise is due.... I don't think it will be obvious to everyone (= more rapidly rising prices) until the end of the year or 2000 sometime. Of course you know -NOW- is the time to figure a plan of attack :) BTW, the growth rate of M2 (money supply) over the last 9 months, has been a harbinger of these "winds of change", imo. Comparisons could probably be drawn to a similar period in the late 60's. (of all times <g>)
if this global strengthening thesis is correct it will spur on a move up in the grains.
Yep, that's the idea.... now that we know what the market is supposed to do, let's see what actually happens. <ggg> All analysis aside, it's still just an issue of price... buying and selling.
PS. I like your system of taking small losses, playing for the big gain.
Thanks. It can go both ways though, as a trading buddy recently pointed out to me my strategy is sort of like "A position trader who day trades - short term trades his positions".... LOL! He nailed it, that's what my trading looks like most of the time, and then I occasionally get lucky and nail some winners. As I said before, it can be a double-edged sword, but one that works for me.... go figure. ok, I've rambled enough for now... talk to you later, take care
Regards,
Frank
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