I did the 'blood red moon'...
This is the year DTN end article that follows up:
"Darin Newsom DTN Senior Analyst
Fri Dec 31, 2010 09:12 AM CST
What is today? Sure, tonight is New Year's Eve 2010, but what does that mean? In market terms, Friday's holiday-shortened session marks the end of the week, the end of the month, the end of the quarter, the end of the year, and the end of decade. Or as I said in the title, the "end of" to the fifth power. When combined with the recent sign of the apocalypse, the blood red moon caused by a lunar eclipse discussed in last week's column, the fog of foreboding is so thick you have to cut it with a knife.
Friday, Dec. 31, 2010, is more than a "triple" witching day for the markets. Darin Newsom calls it an "end of..." to the fifth power day. (DTN graphic by Darin Newsom and Nick Scalise)Let's take these one at a time.
The end of the week. By itself it isn't that exciting. Every week has one, and yes, it usually occurs on a Friday. The only thing that makes this one special is that grain markets close at noon, though from what I've seen in the past, much of the trade that does occur will happen in the first few minutes following the opening bell. The rest of the day will be spent watching the clock.
The end of the month. This is usually met with a great deal more fanfare than the end of the week. This one is no different, as some have attributed this week's struggles to light noncommercial long-liquidation to close out the month. However, being the end of December and falling between two holidays, much like the end of the week, this factor will most likely be met with eyes anxiously looking over electronic calendars, scanning for party possibilities later in the day.
The end of the quarter. Normally, if this occurs in conjunction with the end of the week it can set off a great deal of fireworks. The week leading up to that particular fearsome threesome (end of week/month/quarter) is usually notable for large-scale position-squaring, with profits (hopefully) pocketed to make quarterly financial reports look better. Early this week I had a couple of reporters call and ask me if this would again be this case, and as usual, I was a bit skeptical. As it turned out, the argument could be made that such activity did occur in some key commodities (corn and crude oil), though it was nowhere near as widespread as it could have been.
The end of the year. This is something different though. This is normally the time we devote space to a look back at the year that was, or lessons learned during, or the best of. To me though, there is not time or space to adequately discuss all that we saw in 2010 in regards to commodities, though 90 percent (my rough calculation, nothing scientific) of the goings on could be attributed to adverse weather somewhere in the world.
This to me was what 2010 will be remembered for -- weather. Global corn, wheat, cotton, sugar, and coffee markets (just to name a few, I'm sure I've forgotten some) saw global production and therefore global supply and demand situations dramatically altered due to some kind of weather event.
Take wheat, for example. In 2010 global ending stocks-to-use fell from 30.2 percent at the end of 2009-2010 to only 26.5 percent for 2010-2011. Why? Global wheat crops were decimated excessive heat, unseasonable cold, a once-in-a-century drought, and harvest-time rain. Truly a four-horsemen-of-the-apocalypse scenario, topped off by additional stories of wind and pestilence damage. I think global wheat producers would all agree that the end of 2010 is not necessarily a bad thing, because how is it possible that 2011 could be worse?
Last, but not least, is the end of the decade. Tonight marks the end of the first decade of the new millennium, and what a first decade it was. Think about where you were on New Year's Eve, 2000. Celebrating that night, how many of you thought that the next ten years would see commodities become -- and this is still difficult for me to write -- a much respected, long-term investment opportunity?
That is the situation we are in, though, as the next decade is set to begin just after midnight tonight. Exchange-traded funds, the mutual funds of the 2010s, are multiplying like rabbits with new ones listed almost every week. These ETFs offer investors new ways of participating in commodities that didn't exist before, bringing more money into the commodity sector than would have ever been dreamed of on January 1, 2001.
The bottom line is that the dynamics of the commodity sector have changed dramatically over the last 10 years, one of the reasons that so many markets were finally able to break the shackles that bound them to historic price ranges, moving to levels long-term market bulls could have only imagined. Those new to commodities see nothing that unusual about $13 soybeans, $6.00 corn, almost $10 wheat, and so on. However, those of us who have been in commodities for decades know how much of a change this really is.
So Friday is truly and "end of..." to the fifth power. What it means? Probably nothing, as markets will be set to fire up again Sunday night. If nothing else, it will be an interesting footnote in market history.
Have a good time tonight, be safe in your celebrating, and we'll talk to you again in the New Year.
Darin Newsom can be reached at darin.newsom@telventdtn.com"
Don't laugh... the 'spiritual' side of our markets hold much to learn from and help us make better decisions!!!
It is great that a main stream media like DTN would tackle this 'mammoth'!
This is the year DTN end article that follows up:
"Darin Newsom DTN Senior Analyst
Fri Dec 31, 2010 09:12 AM CST
What is today? Sure, tonight is New Year's Eve 2010, but what does that mean? In market terms, Friday's holiday-shortened session marks the end of the week, the end of the month, the end of the quarter, the end of the year, and the end of decade. Or as I said in the title, the "end of" to the fifth power. When combined with the recent sign of the apocalypse, the blood red moon caused by a lunar eclipse discussed in last week's column, the fog of foreboding is so thick you have to cut it with a knife.
Friday, Dec. 31, 2010, is more than a "triple" witching day for the markets. Darin Newsom calls it an "end of..." to the fifth power day. (DTN graphic by Darin Newsom and Nick Scalise)Let's take these one at a time.
The end of the week. By itself it isn't that exciting. Every week has one, and yes, it usually occurs on a Friday. The only thing that makes this one special is that grain markets close at noon, though from what I've seen in the past, much of the trade that does occur will happen in the first few minutes following the opening bell. The rest of the day will be spent watching the clock.
The end of the month. This is usually met with a great deal more fanfare than the end of the week. This one is no different, as some have attributed this week's struggles to light noncommercial long-liquidation to close out the month. However, being the end of December and falling between two holidays, much like the end of the week, this factor will most likely be met with eyes anxiously looking over electronic calendars, scanning for party possibilities later in the day.
The end of the quarter. Normally, if this occurs in conjunction with the end of the week it can set off a great deal of fireworks. The week leading up to that particular fearsome threesome (end of week/month/quarter) is usually notable for large-scale position-squaring, with profits (hopefully) pocketed to make quarterly financial reports look better. Early this week I had a couple of reporters call and ask me if this would again be this case, and as usual, I was a bit skeptical. As it turned out, the argument could be made that such activity did occur in some key commodities (corn and crude oil), though it was nowhere near as widespread as it could have been.
The end of the year. This is something different though. This is normally the time we devote space to a look back at the year that was, or lessons learned during, or the best of. To me though, there is not time or space to adequately discuss all that we saw in 2010 in regards to commodities, though 90 percent (my rough calculation, nothing scientific) of the goings on could be attributed to adverse weather somewhere in the world.
This to me was what 2010 will be remembered for -- weather. Global corn, wheat, cotton, sugar, and coffee markets (just to name a few, I'm sure I've forgotten some) saw global production and therefore global supply and demand situations dramatically altered due to some kind of weather event.
Take wheat, for example. In 2010 global ending stocks-to-use fell from 30.2 percent at the end of 2009-2010 to only 26.5 percent for 2010-2011. Why? Global wheat crops were decimated excessive heat, unseasonable cold, a once-in-a-century drought, and harvest-time rain. Truly a four-horsemen-of-the-apocalypse scenario, topped off by additional stories of wind and pestilence damage. I think global wheat producers would all agree that the end of 2010 is not necessarily a bad thing, because how is it possible that 2011 could be worse?
Last, but not least, is the end of the decade. Tonight marks the end of the first decade of the new millennium, and what a first decade it was. Think about where you were on New Year's Eve, 2000. Celebrating that night, how many of you thought that the next ten years would see commodities become -- and this is still difficult for me to write -- a much respected, long-term investment opportunity?
That is the situation we are in, though, as the next decade is set to begin just after midnight tonight. Exchange-traded funds, the mutual funds of the 2010s, are multiplying like rabbits with new ones listed almost every week. These ETFs offer investors new ways of participating in commodities that didn't exist before, bringing more money into the commodity sector than would have ever been dreamed of on January 1, 2001.
The bottom line is that the dynamics of the commodity sector have changed dramatically over the last 10 years, one of the reasons that so many markets were finally able to break the shackles that bound them to historic price ranges, moving to levels long-term market bulls could have only imagined. Those new to commodities see nothing that unusual about $13 soybeans, $6.00 corn, almost $10 wheat, and so on. However, those of us who have been in commodities for decades know how much of a change this really is.
So Friday is truly and "end of..." to the fifth power. What it means? Probably nothing, as markets will be set to fire up again Sunday night. If nothing else, it will be an interesting footnote in market history.
Have a good time tonight, be safe in your celebrating, and we'll talk to you again in the New Year.
Darin Newsom can be reached at darin.newsom@telventdtn.com"
Don't laugh... the 'spiritual' side of our markets hold much to learn from and help us make better decisions!!!
It is great that a main stream media like DTN would tackle this 'mammoth'!
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