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Showing posts from February, 2012

Pour some sugar on me

Sugar has been creeping higher lately, as seen on the daily futures chart. 



Here's the weekly view which shows the longer swings going back to 2006. 



Note the larger uptrends and ensuing deep retracements that have happened from the 2007 base, near 10 cents, on. 

Of course, the latest move is more of a slow edge higher off the recent price shelf of 23-24 cents. Sugar will have to clear the 30 cent level and the recent highs near 32 cents before any major move is evident on the weekly charts.

Here's the daily chart of SGG, the sugar ETN. I'll be watching for a pullback on lighter volume in the days ahead. Since I'm not active in the futures market, I'll consider a long position in SGG. 



Cautionary note: volume is very light in many of these single commodity ETNs. That may lead me to consider other, more liquid, trade opportunities instead.

For those who'd like to read more about sugar from a futures trader's point of view, please see Peter Brandt's recent blo…

John Burbank talks oil, macro with Bloomberg

Noted hedge fund manager, John Burbank of Passport Capital talks oil, investing in Saudi Arabia, stockpicking in 2012, and global macro in this recent Bloomberg TV interview. 

A few key points from Burbank's interview: 

1. Oil prices are up 16% YTD, which hurts the average oil-dependent consumer (chart). Burbank feels global QE operations and "liquidity" boosts are pushing up oil prices. If gold goes up 10-20%, it doesn't cause problems for consumers the way rising oil prices do.

2. Rising oil prices are benefiting Saudi Arabia. Passport now has 15% of its capital in the Saudi stock market, a country which is slowly opening up to foreign investors. 

Passport started investing in Saudi Arabia in 2008 (through notes & swaps) and Burbank feels the potential there is similar to India in the 2003-2004 period. Here's a chart of India's SENSEX over the 1998-2012 period.

3. Liquidity is coming into the market because "things are really bad", not because thi…

Nassim Taleb on Antifragility

Nassim Taleb on Antifragility, interview at EconTalk (Hat tip: Nancy Miller).

Key early point from Russ Robert's chat w/ Taleb on fragility vs. "antifragility": 
"...Art [Devany] gave me a lot of ideas and suddenly everything flashed together, when I made the distinction between two types of systems, the organic and the non-organic.The organic has the property that the difference between the living and the dead, the living and the non-living; the living, between living and a machine for example, requires stressors. That's how the complex systems communicate with their environment. You need a stressor. As with the bones, with your muscles, a lot of things. And usually overcompensate for the stressors--there is a mechanism in biology called hormesis. This table I have in front of me will never get better if I bang on it. Use it and lose it.

On the other hand, the human body gets better if it is exposed to the right amount of stressors. Of course, you …

Charts: potential new uptrends in CREE, DLB

Looking at a potential change in trend for CREE, maker of LED lighting products. 



I've done up the chart in the manner of Vic Sperandeo's "1-2-3" trend change guide. As you can see, CREE has broken out above the trend line. The lowest low preceding the breakout provides a test floor or boundary and the previous minor rally high acts as the ceiling which CREE must break through to define the change in trend. 

Right now we have a possible change in trend. If CREE tests that upper boundary and then breaks out above that previous high, we'll have a defined trend change and a new uptrend in place, according to Sperandeo's method. 

Also, a recent break above a year-long downtrend line and a successful fill of a prior downward gap at the 37.60 level may be a sign of a positive trend for Dolby (DLB). 



I have to say I'm not as familiar with the current fundamental picture on Dolby. Of course, they are a leader in film sound technology and surround sound, etc. for home…

Puplava: listen to what the markets are saying

While catching up with Chris Puplava's latest market update last night, I had to stop and share some of his words with our followers on Twitter

Read the opening of Chris' article, "Stop Talking and Start Listening!". You'll find some worthwhile comments on interpreting data and the importance of maintaining accountability in one's market calls. 

"...Far too often investment managers and economists spend more time espousing their views and then defending them until eventually proven right (“I was just early”), rather than spending more time analyzing their assumptions and being honest enough to say, “I WAS WRONG!” and then moving forward. 

Part of the problem is that they create a view and then find evidence to support their views rather than starting from the bottom up by collecting an exhaustive amount of data and then summarizing the collective message rather than their views. 

Basically, listen to the message of the markets and then interpret th…