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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Archie Meeties who wrote (121135)	5/28/2009 11:43:29 PM
From: The Reaper	2 Recommendations Read Replies (1) \| Respond to of 206114

The BDI is something that is really interesting. It's rebounded to it's highest level since last Sept. and it is a real measure in the world of shipping, not something that can be bid up on a commodity exchange. The materials stocks have been leading the way lately for a reason. The BDI confirms these moves. Somebody, somewhere is buying "stuff". This has kept me long this market albeit like a cat in a room full of rocking chairs.

To: Archie Meeties who wrote (121135)	6/2/2009 8:29:52 AM
From: Ed Ajootian	Read Replies (4) \| Respond to of 206114

Arch, great point about commodities markets becoming more tilted toward being, as you say, a "discounting mechanism" vs. "price discovery". Those going long UNG now are betting that the natty futures price will appreciate even more than the dramatic contango currently shown in the futures strip. Dec. natty is currently 40% higher than the near-month contract. This means if Dec. actually "only" appreciates 35% by the time that UNG rolls into that month, the price of a share of UNG will actually be lower than it is now. Interesting that you mention the Baltic Dry Index. I had heard about this awhile back but paid no attention to it until a friend of mine, whose opinion I value highly, told me he dumped all his E&P stocks in June of last year, based on info he was getting regarding this index. Do you use it, and if so have you found it to be helpful? I believe we are currently in a period where there is a lot of inventory "restocking" going on, where businesses are finally realizing that the world as we know it is not coming to an end after all. Thus it would seem that some of the current shipping activity would not be sustainable once this restocking is over with.