Portfolio and risk managers, actuaries, and engineers bringing straightforward and robust trading & investment advice to the public -- and institutions.
Thursday, May 5, 2011
Volatile Commodities & Futures Markets
Just a quick report on the volatility in the commodities & futures markets. Our risk management approaches got us out of oil and goldbeforethe steep declines today. On the other hand, the downdraft crept into many other markets (industrial metals, agriculturals, foreign currencies, US Dollar) -- and reversed long-standing trends in early May. This caused us to give up much of the recent profits we have earned over the past several weeks. Our Diversified Programs are down about -3.5% this month.
As reported by MarketWatch, commodities suffered their worst decline since 2009. Please read more here:
CRB Index Past 3 months (as of 5/5/11; see the last bar on the right...)
Thank you to INO.com for the chart.
Today alone, crude oil declined $10/barrel to below $100 and gold declined about $50/ounce to below $1500. The Liquid Commodity Index reflected the recent volatility -- declining -5% today (May 5, 2011); and is down -8.6% for the month, after rising to new highs in April.
We currently have relatively small positions, reflecting the reversals and volatility in the futures markets. We will, of course, continue to "do what we do" -- and will follow our trading system/risk management strategies. (Unfortunately, this kind of market action is not unprecedented.)