A view on commodities

Catch22

Well-Known Member
(16Oct2014 20:00:20) : Natural Gas Inventory Update - U.S commercial N.Gas inventories increased by 94 BCF from the previous week. (Forecast 91) (Previous 105) Data slight negative for N.Gas

Holding short in NG from 236.4 ..will trail stop at 233 and hold for target 232
 

DSM

Well-Known Member
Was out, so did not trade. Just as well. After a big fall on inventory report, NG has bounced back. Better at times to watch action from the sideline. :)

(16Oct2014 20:00:20) : Natural Gas Inventory Update - U.S commercial N.Gas inventories increased by 94 BCF from the previous week. (Forecast 91) (Previous 105) Data slight negative for N.Gas

Holding short in NG from 236.4 ..will trail stop at 233 and hold for target 232
 

Catch22

Well-Known Member
Yes .Inventory day is tricky .On certain inventory days of NG [not of crude] ,I pick a trade close to 7.50 PM or so and place a sl as well as target cover before inventory data .The whole act is over within seconds !!!
Today though it did not fall as much as I thought it would so decided to change the target and trail with a sl .And no ;) I don’t do this every week .Only if /when I’m confident .
 

Steve

Active Member
Yes .Inventory day is tricky .On certain inventory days of NG [not of crude] ,I pick a trade close to 7.50 PM or so and place a sl as well as target cover before inventory data .The whole act is over within seconds !!!
Today though it did not fall as much as I thought it would so decided to change the target and trail with a sl .And no ;) I don’t do this every week .Only if /when I’m confident .

With NG to pick a trade at 7.50 or 7.55 pm with a SL, can at most times be counter productive, as at 7.58 - 7.59 pm at inventory declarations NG takes out huge SL before proceeding on its course. Got bummed once, gotta be careful, better to put a market order immediately after inventory result are out with increased lots, that way you are in control, you may get shorter targets, but it does away, with the lottery trade.
 

DSM

Well-Known Member
@Steve,

Had posted article denoting fundamental views (see post 80 of this thread), which is pretty bearish. Since the past four weeks, crude has been in decline, and presently hovering near support. While bullish rallies (bounces) cannot be ruled out, (as is happening now) these are plays for a few hours to a few days at most (unless the global economic scenario and crude demand and supply balance changes) As traders, we need to look at the charts and trade any side that provides opportunities, but as the main trend is down, I would be reluctant to take any overnight long positions. My 2C.

@DSM,

Whats your take on crude?
 

DSM

Well-Known Member
PAUL TUDOR JONES: Commodities Will Be Ugly Until At Least 2020

Read more: http://www.businessinsider.com/paul-tudor-jones-and-druckenmiller-panel-2014-10#ixzz3Gn3UuC3o

For traders like us, holding a position for a few hours, let alone a few days cannot be done without looking at the charts/MTM. And here's Paul Tudor Jones, a star trader featured in 'The Market Wizard' series, taking a view on commodity for next 6 years. (Not saying that he may be holding positions for that time frame, but a few months to a year or a few years is what hedge funds look to when they deploy tens, hundreds or billion dollar trades. So here' Paul Tudor Jones with his view)

Commodity prices have been falling around the world, and Paul Tudor Jones II thinks this trend will play out through 2020. On Monday, the legendary macro trader was interviewed by another legend, Stanley Druckenmiller, at the Robin Hood Investors Conference.

The conference, which is stacked with hedge fund heavyweights, is off limits to the press. We have a source inside who was kind enough to share his notes from Monday evening's panel. According to our source's notes, Jones says we are in the downturn for the current commodities cycle. Having reached the peak of the cycle a few years ago, we are still heading down to the bottom.

Jones said these commodity cycles run in roughly 30-year cycles between peaks — 1999 was a valley, and April 2011 was the peak. He said this cycle would play out through the downside through 2020 or so but would be net positive for the US economy.

Jones also touched on other macro topics during the discussion. Jones talked about deleveraging in China and how that would be negative for the financial sector as well as commodities there. He basically said that there was a credit bubble and that the "the piper will be paid and the bubble will burst."

He said in about 2029 the US will breach Greek debt levels, according to our source. He also talked about Japan and Japanese Government Bonds, which are up over 30% with extremely low trading volume. He's wondering when the yields will pop. Later in the panel, Jones said the European Central Bank and the Bank of Japan would keep cutting rates. He said the yen needed to depreciate 15% per year to increase inflation 1% to 1.5%.

His trade is to get long the dollar versus the yen. According to our source's notes, the dollar rally versus other currencies may have run its course. The panel fell on the anniversary of Black Monday — a market crash event that Jones famously predicted back in 1987 and that netted him millions.

According to our source's notes, Druckenmiller asked Jones about the similarities between 1987 and what's going on now. Jones said the 1987 crash was derivative inspired. The S&P futures were down 33% before the open on that Monday. He also said that 1987 was dissimilar to what's going on now. He said we have a bubble now, and he's not sure whether it's in the stock market, according to our source's notes.

As for last week's market activity, Jones said that on Thursday we saw a five standard deviation (that's a volatility measure) kind of movement in one day. He said we would see this kind of volatility in the future. Speaking of the volatility of the past two to three weeks, he said that was due to position clearing and that it was similar to October 1998. (Our source pointed out that's when the Long-Term Capital Management event happened. Jones didn't explicitly say that, though.)



Read more: http://www.businessinsider.com/paul-tudor-jones-and-druckenmiller-panel-2014-10#ixzz3Gn4rp7t7
 

DSM

Well-Known Member

Posting two charts for Crude and NG in response to a member's query. It gives the idea of the trend (and also recognising bounce back from lower levels, which cannot be considered a change in trend)




 

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