Saturday, March 29, 2008

Market Commentary sent to Timer Digest on Friday March 28, 2008

Market Commentary sent to Timer Digest on Friday March 28, 2008SocialTwist Tell-a-Friend
Fari Hamzei

When the McClellan Oscillators hooked earlier this week, the short-term trade was to sell the market indices. Don't be fooled, the longer trend is still up and we should be oversold shortly as this is all part of the bottoming process.

Stay the course and enjoy the Spring Madness...



Tuesday, March 25, 2008

The Commodity Bull Market is Alive and Well

The Commodity Bull Market is Alive and WellSocialTwist Tell-a-Friend
Sally Limantour

As most of you know, commodities went through an overdue correction last week. This shouldn’t have been a big deal. Here’s the problem though. As a result of that correction, some folks are making assumptions that don’t make sense. In fact, some of these assumptions are downright dangerous.

For example, the media and others are giving Fed Chairman Bernanke credit for “putting an end to commodity inflation” with his brilliant strategies.
On March 21st, Bloomberg stated that “the biggest commodity collapse in at least five decades may signal Federal reserve Chairman Ben Bernanke has revived confidence in financial firms.”

Or how about this: Ron Goodis, a trader with the Equidex Brokerage group, tells us that “Bernanke took care of the commodity bubble.”

This is faulty thinking. To imagine that Bernanke deserves credit as the commodity dragon slayer, even as he lowers interest rates and continues to stoke inflation, is mind-boggling.

Sources of the Sell-off

So what exactly caused the vicious sell-off in commodities? When all was said and done, by last Thursday’s close, gold had its biggest weekly loss since August 1990. Oil had plunged almost $10 over three days. The corn market was off by 9%. There were a number of things that contributed to the sell-off. First, the commodity markets had gotten ahead of themselves, and were in a classic “overbought” situation. Second, derivative trading losses and shrinking credit lines were forcing hedge funds to liquidate their winning trades – many of those trades in commodities – in order to free up capital.

There was also fear that the CFTC (Commodity Futures Trading Commission) was on the verge of raising margin requirements for commodity positions. This is what happened at the end of the last big commodity bull market, when the Hunt brothers were forced to liquidate their silver positions. (I was on the trading floor at the time… it wasn’t pretty.)

Furthermore, the dollar was oversold and ready for a bounce. All these factors combined to create a swift break, which has now taken many commodities back to more attractive buying levels.


Facing the Facts

To say the commodity bull market is over is just, well, a bunch of bull. Let’s take a look at the facts. Energy prices, precious metals, agriculture prices, and other commodities have been in a bull market trend since 2000. The UBS Bloomberg Constant Maturity Commodity Index has gained 20 percent every year since 2001. For 2008 the index is up over 10%.

The big picture has not changed. We still have central banks pumping money like mad into the global financial system. This is obviously long-term inflationary. Helicopter Ben is not going away. Nor is his one-trick strategy to save the world – running a printing press. This is long-term bullish for gold and silver.

In regard to agricultural commodities, the 2008 crops are not even in the ground. Demand issues are pressing and widespread. There are still record high rice prices (a global food staple) in Asia. Egypt is in the midst of a serious “bread crisis” for lack of grain. An outbreak of “sharp eyespot disease,” or SED, now threatens 4.83 million hectares of wheat in major producing areas throughout China. Water is increasingly scarce.

In regard to energy, no major new finds have been tapped in recent memory, North American natural gas demand is set to outpace supply over time, and the global supply-demand situation is still supportive of high oil prices. (That said, crude oil’s parabolic move from $85 has been enormous, and a trading range may be in order for crude.)

Three Billion Strong

In the macro picture, we still have the incredible growth stories of China, India, Brazil and Russia under way – not to mention many other fast-growing countries that get less attention in the headlines.


While there is talk of “recoupling” (the tongue in cheek opposite of decoupling), it is hard to argue with the fact that 5.6 billion people currently consume just one third of the world’s raw materials. That 5.6 billion grows more successful, and more hungry, every day.

As my good friend Clyde Harrison (www.brookeshirerawmaterials.com) says ,“the industrial revolution involved 300 million people. The emerging nation revolution involves 3 billion.”

When discussing the general supply-demand imbalance for commodities, I am referring to a very, very big trend. In fact, we now have two “megatrends” that are colliding. Thirty years of restrained and neglected natural resource supply are coming face to face with three billion people intent on discovering capitalism. Irresistible force meets immovable object? We haven’t seen anything yet.


Reversing the Reversal

Monday’s trading action in commodities saw a “reversal of the reversal,” with solid moves higher in many different areas. Today we are seeing follow through on the upside. Soybeans have tacked on $1.00 per bushel since the Thursday’s lows and are limit up today.. Wheat is up over 10% and corn has rallied 8%. The metals are recovering as well with gold, silver and copper all gaining between 3-5%.

The commodity bull market is alive and well. Last week’s correction let some much needed air out of the balloon, that’s all. It would be healthy at this point to see some consolidation, but we might not get it. Already it looks like commodities could be off to the races once again.

Tuesday, March 18, 2008

Markt Timing Bias Change

Markt Timing Bias ChangeSocialTwist Tell-a-Friend
March 17, 2008

Fari,

We have logged your S&P 500 Buy signal as of the 03/17/08 Close.

Thanks,

Jim


In a message dated 3/17/2008 3:59:26 P.M. Eastern Daylight Time, Support@HamzeiAnalytics.com writes:


Dear Jim,
For your coveted Timer of the Year Competition, we are going LONG S&P-500 Stock Cash Index (SPX) at the CLOSE today. Please confirm your receipt of this email.
Cheers............

All the best;

Fari Hamzei
Founder
Hamzei Analytics, LLC


Tel: (310) 306-1200
Fax: (615) 858-5448
Cell: (310) 995-8386



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Sunday, March 16, 2008

Market Commentary sent to Timer Digest on Friday March 14, 2008

Market Commentary sent to Timer Digest on Friday March 14, 2008SocialTwist Tell-a-Friend
Fari Hamzei

This week, Uncle Ben and Comrade Paulson, with a coordinated attack plan in their back pocket, came in to rescue the Credit Markets, in general, and now we find out, the Bear Stearns & Co. (NYSE: BSC) in particular. BSC is an 85-year old primary broker dealer for the Treasury Bills, Notes and Bonds. All of this ahead of Spring Equinox and Mar OX.

Market smelled blood and went short big time. It is a bleak Friday on both Wall Street and Main Streets. With low Consumer Confidence numbers, record gold and oil prices, and a big investment house having its market cap getting clipped by 50%, the bottoming process is well under way.

Given the most recent market action (near -2 sigma on major indices), we fully expect that The President's Working Group on Financial Markets, better known as PPT, will move in next week and that is the time to hunt for some bargains. Novices better stay on the sidelines till the dust settles.

Wednesday, March 12, 2008

We Closed our Short SPX Position with Timer Digest

We Closed our Short SPX Position with Timer DigestSocialTwist Tell-a-Friend
Fari Hamzei

The following email went out to our MSA List Members this morning at 1037 CST (w/o the chart).


Timer Digest just confirmed that we are FLAT SPX as of last night close.

NYSE McClellan Oscillator yesterday hit -279 while NASDAQ McClellan Oscillator closed at -179. DJIA, SPX, DJ Trans & RUT each closed just a tad above -3 sigma, NDX was at -3 sigma, VIX, VXO & VXN closed above +2 sigma.



So late last night, we decided to cover our SPX SHORT position from 1507 (put on 6/8/07) and booked 234 SPX points for now.

Again we repeat, we are NOT LONG SPX here. We are FLAT SPX. If and when we go LONG, we will update you all immediately.

Sunday, March 9, 2008

A Few 30 Minutes Charts Worth Noting

A Few 30 Minutes Charts Worth NotingSocialTwist Tell-a-Friend
Brad Sullivan

These charts were posted on Thursday March 6, 2008 at 1215 CST in our SuperPlatinum Virtual Trading Room.









Equity Index Update

Equity Index UpdateSocialTwist Tell-a-Friend
Brad Sullivan

This article and accompanying charts were posted on Thursday March 6, 2008 at 0830 CST in our SuperPlatinum Virtual Trading Room.

The index markets appear to be set for another volatile session as news out of MER, FNM and TMA have knocked the markets substantially from overnight highs. On the positive side of the ledger, WMT boosted their dividend and announced slightly better than anticipated monthly sales figures. Currently, the SPH is trading at 1328.50, -7.00 on the session and in the heart of yesterday’s final hour choppy trading zone. Considering that the Employment reading will be tomorrow morning, one has to wonder if the market will have enough “juice” to move substantially in either direction. However, if the news cycle continues to deteriorate and the dollar freefalls, anything can happen.

I have included several charts today…among them is a chart with daily closes in the SP Cash. It is worth noting that we are, for all intents and purposes, locked in a range between the January closing low of 1310.50 and the Feb High of 1392. However, the substantial portion of the settlements in the index has occurred between 1360 and 1335. The situation now is this…is we building a base from which to move higher or a topping base from which to move lower?









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