Thursday, July 12, 2012

Stock Market Systems: Full Steam Ahead (7/12/12)

Our stock market indicators just switched to:  all bullish.  This is a change from our last update of almost a month ago, on June 16th, when our overbought / oversold indicators flashed a "pause" signal when the S&P stood at around 1343.

Since the last update on June 16th, the stock market has been churning and has been fairly volatile (in a range of about 1313-1370), but is relatively unchanged over the entire time period -- and currently stands at 1336.8.  Here is a look at our stock indicators:

  • Our long-term model remains strongly bullish.
  • Our intermediate overbought / oversold indicators are strongly bullish as well. 
  • Our short-term models reflect short-term movements, so we do not typically list the current signal.  
Traders -- including stock index futures traders -- may want to be long in the stock indices.  Long-term investors with an over-allocation to cash may want to put some of that cash to work.  

Thursday, July 5, 2012

Commodities: Dry Weather Pushes Grains Higher

Dry weather in the US Midwest, over an extended period, has turned what some predicted to be a bumper crop -- into a potential disaster for this year's crops.  Corn, in particular, has been in the news, with recent prices soaring above $7.00 per bushel, from a recent price in the $5.50 range.

It is noteworthy that corn started the year in the $6.20 to $6.80 range, but weather forecasts, the shaky economy -- and other predictions (of a bumper crop) -- caused choppy price action down to the $5.50 level.  Today, corn surpassed the $7.00 level -- and all eyes are on Mother Nature -- and the weather.  One expert calls for some potential relief over the weekend, albeit -- not much -- before more oppressive heat (and dry weather) continues in the near-term afterwards.  

Some farmers are comparing the weather and crop conditions to the 1988 drought, while others are even bringing up the 1930's Dust Bowl scenario.  On the other hand, some say it is too early -- and that the situation is fluid (no pun intended) -- and that we will only know after "pollination," at the end of the summer.

A spike in food prices -- and a potential blip in (food) inflation will not be good news for an already shaky economy.  On the other hand, managed futures traders have been caught in choppy market action for quite a while, so sustained trends will be a positive for futures traders.

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