Wednesday, August 25, 2010

Cotton Bubble?

Stephen Gandel, of CNNMoney thinks Cotton is in a Minor Bubble

See the whole article here

Regarding Cotton,

Why It's Hot

Cotton prices have nearly doubled in the past year to 80¢ a pound. The world has been using more but producing less. Last year's U.S. cotton production dropped to 12.2 million bales, the smallest crop in 20 years. And rising populations are causing nations like China and India to devote more land to foodstuffs and less to cotton.

Why It's Worrisome

The two-year run has given farmers plenty of time to ramp up production, which means more cotton will soon be on the market and lower prices will follow. The USDA estimates that U.S. production will hit 18.6 million bales this year, up 50% from a year ago.

Verdict: A Minor Bubble

Analyst Sharon Johnson of First Capital Group says cotton has traded around 50¢ a pound for much of the past decade. When cotton has spiked above 80¢, it hasn't stayed there for long. "Prices are overvalued," she says.

Monday, August 23, 2010

China Gold Buying

Interesting article on seeking alpha today about gold.
Martin Hutchinson claims that China usually holds 10% of its reserves in Gold. Currently they only hold 1.5% in the yellow metal. With current reserves at $2 trillion, China might be in the market to buy $85 billion worth of gold. This equates to over 67 million ounces.

Wednesday, August 18, 2010

Winner, Winner

Interesting video on yahoo on blackjack and trading.
Go to this link to see it.
Jeff Ma on Yahoo
One thing he said which struck a chord with me was "people are more impacted by a loss than by a win". Meaning, you are more negatively impacted by a LOSS of $1,000 than you are positively impacted by a WIN of $1,000. So, your wins should always be more than your losses to maintain emotional equity.

Saturday, August 14, 2010

Gold and 34 Week Moving Average

A post on Seeking Alpha shows the 34 Week Exponential Moving average on Gold.
See the article here :
The author states that the Expo Moving Average is a good stop. Maybe? I tested via the Futures Truth Excalibur platform on a 34 week simple moving average. Only entering on a Friday Close above the 34 week simple moving average. Exiting on a move below the 34 week moving average. This method gets stopped out 50 times and shows a Total Hypothetical profit of $14,140 and Maximum Drawdown of $32,890. A better method for this TRENDING MARKET would be to place the stop 5% below the Simple Moving Average. This shows a Total Hypothetical profit of $47,140. A max drawdown of $24,300 and percent winners of 59%. Such a big stop works well on trending markets. Probably not so much on congestion markets.
All results hypothetical. Past performance not necessarily indicative of futures results. This is for informative purposes only.

Friday, August 13, 2010

Gold Breakout

December Gold looks like it had a Yum-Yum breakout of an Irregular Head and Shoulders bottom. It is Irregular in that it has 2 Left Shoulders and only 1 Right. The move from the bottom (Head) up to the breakout point should provide a measure above the breakout to the price target.

Thursday, August 12, 2010

Gimme Shelter

Some people say they don't see inflation.
From Daily Reckoning at

In 1970, a year after the Rolling Stones released the greatest rock 'n' roll track of all time, you might have picked up a front-row ticket to see the British invaders for around $20. Adjusted for "official" inflation, that same ticket (or any other $20 item) would today set you back $112.35. That's a 461.8% jump in price. (Adjusted for unofficial inflation - i.e. actual prices - a front-row Stones ticket would cost something like $350). Some safekeeping!

Tuesday, August 10, 2010

sell dollars

This loss of entrepreneur confidence in the system will ultimately accelerate the demise of all paper currencies.
From the Daily Reckoning,
August 10, 2010

Saturday, August 7, 2010

stock market performance

This is 6 months old but still illustrates the importance of diversification across asset classes. Gold and Silver are up big for last 5 years. Crude Oil has done nicely too. The S and P 500, not so much.

Friday, August 6, 2010

More Money

Our government’s current solution, regardless of party, is to print more money. This brings to mind a statement by Ethel Kennedy (wife of RFK) when notified by her accountant that her checking account was overdrawn: “That can’t be, I still have checks left.”
From Whiskey and Gunpowder newsletter

Thursday, August 5, 2010

Stafford Daytrade System

Yesterday was a narrow range day. Not much action. Stafford Daytrade made 2 points none the less. Of course past performance is not necessarily indicative of future results. We bought at 1122.25. Holding till the close to cover at 1124.50. $100 per emini contract. Not bad for a day with a 10 point range. All trades must be considered hypothetical because they may or may not have occurred exactly as mentioned. Please see disclaimer on

Wednesday, August 4, 2010

10 stock market myths

Nice article on staying out of stocks.

Ten Stock-Market Myths That Just Won't Die

by Brett Arends

1 "This is a good time to invest in the stock market."

Really? Ask your broker when he warned clients that it was a bad time to invest. October 2007? February 2000?

2 "Stocks on average make you about 10% a year."

Stop right there. This is based on some past history — stretching back to the 1800s — and it's full of holes.

read the rest here.

Tuesday, August 3, 2010

Mid-Term Elections

Bloomberg Business week for July 26 reports that "The Standard & Poor's 500 stck index has advanced 15 percent on average in years when there was a Democratic President and REpublican majority in Congress. In 1994's congressional elections, Dems gave up their majority in both the Senate and House. This was followed by a 34 percent surge in 1995 in the S&P's.

Monday, August 2, 2010

Interesting article on silver, which has been up big for the last 2 days. Nice spring off the lows. Three Reasons Silver will go up.
1. Silver has many more uses than gold.
3. Silver is rarer than gold.
Does this mean $1000 an ounce silver?