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While the trade rift between the US and China could eventually be settled peacefully, it could be very difficult to avoid further escalation in the coming week. As of last Friday, it appeared as though the trade war threats were extended beyond the governmental level and to the populace in China, with calls to “buy Chinese” and boycott US products. China also threatened to increase…
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Over the past month the markets have been presented with fears of a nuclear attack, a US or Japanese attack on North Korea, more Washington gridlock and one of the worst natural disasters in US history, and yet some equity measures are starting September at all-time highs!
The Fed symposium in Jackson Hole failed to offer any distinct direction on the state of the US economy, but recent Fed commentary suggested that a government shutdown off the budget ceiling battle and the possible effects from Hurricane Harvey could impact policy decisions next month.
In retrospect, the recent sharp declines in equity prices and significant pressure on industrial commodities were justified by disappointing US scheduled data and the Fed’s move to notch interest rates upward.
The spec and fund net long of 20 nonfinancial commodities has come down significantly in March (down roughly 650,000 contracts), but it remains at lofty levels.
This is a sample entry from Don DeBartolo’s email newsletter, Trade Spotlight: Spreads, published on Wednesday, October 5, 2016. There is a bear futures spread trade opportunity in the Unleaded Gasoline market on a Trend Line breakout today. Establishing a bearish position where a front month contract is sold and a deferred month contract is… Read more.
The early July COT spec and fund net long position reading in 20 non-financial commodities, combined with ongoing strength in the US Dollar and favorable US grain production weather, leaves the path of least resistance in most markets pointing to the downside.
Death and Pestilence off of Brexit has failed to surface so far!