Commodity / Tech Plunge

[errolanderson]

This is getting serious . . . NASDAQ now in steep fallout . . . crude oil (king of commodities) under-siege.

The watch now will be on credit markets . . . . Everything is leveraged to-the-nines and painful margin calls will create forced liquidation. Gold may break below $1,900 per oz once again as weak longs get blown out.

Even give-away money won't stop this outflow (IMO) . . . .

[farming101]

And grains? Fall in sympathy?

Canola, look out above!

[GDR]

This is getting serious . . . NASDAQ now in steep fallout . . . crude oil (king of commodities) under-siege.

The watch now will be on credit markets . . . . Everything is leveraged to-the-nines and painful margin calls will create forced liquidation. Gold may break below $1,900 per oz once again as weak longs get blown out.

Even give-away money won't stop this outflow (IMO) . . . .

So Errol where is the money gonna go? Guys aren't gonna sit on cash are they.

Oil drop should be good for grain basis shouldn't it?

[errolanderson]

Canola, look out above!

Cdn dollar breaks uptrend on crude washout. 75 cent support? Frost, lack of grower pricing, higher soyoil and short covering all contributing to today's rally.

January $500 put options traded under $5/MT today . . . offers about $11.20/bu floor minus basis.

[farming101]

Resistance in Jan canola at 519.50, then 530 or so. The wild west has returned

[Austrian Economics]

What has stimulated the equity markets in the last few months is fairly simple: the drop in interest rates back to zero. But like a long term heroin addict, each new fix is never as potent as the previous ones, so the dosage must get progressively higher over time. If the central banks want to avoid a repeat of the action a few months ago, they are going to have to cut rates below zero.

The return to falling commodity prices is a natural consequence of the falling interest rate cycle in fiat currencies. We have been in this down cycle for 40 years now, and no one in authority is seriously interested in reversing it. If they wanted to challenge this policy, they would have to challenge the whole idea of a monetary system based on irredeemable free floating fiat money. That's a big step for most of those in charge of monetary policy, given that 99% are Keynesians.

Look out below!

[burnt]

Soybean price chart since 1970.

https://www.macrotrends.net/2531/soybean-prices-historical-chart-data https://www.macrotrends.net/2531/soybean-prices-historical-chart-data

Dad bought this 100 acre home farm on which I park my carcass for $10,500 in 1964. Soys were - what - $2.50 - $3.00? (None grown around here then)

Then in 9 years they climbed to $11.51. and the farm was worth maybe $15 - $20,000.

Today Chicago is $9.60 and the same dirt under me is likely worth $1,500,000.

Farms pay. Right?

[errolanderson]

So Errol where is the money gonna go? Guys aren't gonna sit on cash are they.

Oil drop should be good for grain basis shouldn't it?

Very good question . . . real estate may be a target. This cheap money may snap up properties above market ask despite poor economy. Home renos (property improvements) may be a way of parking money.

We are all in a very strange economic environment.

[errolanderson]

Tesla lost 21% today, the worst single day loss in history . . . .

[errolanderson]

Commodity markets remain at a high risk (IMO) of a setback heading into the fall . . . .

Dr. Copper may have a say as fundamentals now point lower as the global economy slows. Also, crude oil is now in a decisive downtrend. These are commodity price leaders . . . .

As for hot lumber, quite overbought. A lot of jobless heading into the winter market. A setback might be severe. We are likely in for some interesting price moves and re-alignments heading into the fall in some of these key commodity markets.

Keep your marketing guard up . . . .

[biglentil]

I think your missing the 🐘 in the room. China is dumping 200B US treasuries on the market and stockpiling commodities especially copper. The fed and central banks were once the buyer of last resort for bonds and treasuries now they are the only buyer left. Canada's Central bank is committed to $5b a week in monetization. We've seen one of the deepest bear markets in gold from 2011 till 2018. We are now in a bull market in commodities and the price reversal of commodities like silver, nickel and copper has been stunning. Errol you've been bearish on gold since $900 an ounce, even hard-core gold bashers like Warren Buffet are selling banks and buying stakes in gold miners. Pension funds are starting to move into gold as well.

[errolanderson]

I think your missing the 🐘 in the room. China is dumping 200B US treasuries on the market and stockpiling commodities especially copper. The fed and central banks were once the buyer of last resort for bonds and treasuries now they are the only buyer left. Canada's Central bank is committed to $5b a week in monetization. We've seen one of the deepest bear markets in gold from 2011 till 2018. We are now in a bull market in commodities and the price reversal of commodities like silver, nickel and copper has been stunning. Errol you've been bearish on gold since $900 an ounce, even hard-core gold bashers like Warren Buffet are selling banks and buying stakes in gold miners. Pension funds are starting to move into gold as well.

Right now, it's all about the fallout in the U.S. dollar. The China Yuan has been steadily strengthening against the dollar. If the USD begins to rebound, gold drops pure and simple. Commodities drop.

Crude oil is struggling, copper is vulnerable . . . those are two key sister ships. Right now, this whole show right now is on the USD (IMO).

[errolanderson]

Right now, it's all about the fallout in the U.S. dollar. The China Yuan has been steadily strengthening against the dollar. If the USD begins to rebound, gold drops pure and simple. Commodities drop.

Crude oil is struggling, copper is vulnerable . . . those are two key sister ships. Right now, this whole show right now is on the USD (IMO).

On a breakdown, key support for gold appears technically @ $1,840 per oz (IMO). We will all see . . . .

[farming101]

The USDX was lower than it is now for 11 years in a row starting in 2003. Could certainly go lower.
Technically gold could be a sell, but looks iffy right now. Would need a really big margin acct

[errolanderson]

The USDX was lower than it is now for 11 years in a row starting in 2003. Could certainly go lower.
Technically gold could be a sell, but looks iffy right now. Would need a really big margin acct

Pension funds buying gold is a warning sign in-itself . . . .