Commodities euphoria may signal bubble(oil,steel,etc)

The Standard ^ | 04/26/05

[TigerLikesRooster]

stock --> mortgage --> commodity --> ???

Maybe they could bid up Renminbi, too.

[the invisib1e hand]

forecast like Goldman's ``does typically mark the euphoria that's seen at market extremes,'' Berman said.

or, putting another face on it, such a forecast takes advantage of the euphoria that's seen in markets from time to time.

[Mulder]

Some believe we are in the first phases of a major commodity bull market. (Read "Hot Commodities" by Jim Rogers).

Like all bull markets, there will be pullbacks. Nothing goes straight up or straight down.

[the invisib1e hand]

anyway what it signals is screaming demand worldwide.

[NonValueAdded]

bump

[tm22721]

stock --> mortgage --> commodity --> ???

The timing of the next bubble will be up to the next Fed chairman, probably 'helicopter' Bernanke.

BUMP

[2banana]

Goldman Sachs analysts sent crude oil prices soaring when they said March 30 that the price could eventually reach US$105 (HK$819) a barrel.

To Larry Berman, chief technical strategist at CIBC World Markets, it had the whiff of late 1998, when analyst Henry Blodget forecast Amazon.com shares would hit US$400 a share.

To make money, you must but low and sell high. It sounds simple but the hardest thing in the world to do is to sell when everyone else is buying and to buy when everyone else is selling...

Also to add to the above, 2 bdr shack in NYC or LA for $700,000...

[Dilbert56]

"Slowdown" in the US economy? We heard that in 4Q04 when preliminary results said growth fell to 3.1%. Final numbers put it at 3.8%. I'll believe the 3.1% numbers when they're final.

[sixmil]

Interesting thought, but is there really speculative demand for commodities now like there was for stocks and still is for real estate? If someone were to say that the next stop for fed induced inflation is commodities, that might be a better guess.

[redgolum]

For later

[Rodney King]

I wish they would do me a favor and bid up cotton.

[M. Espinola]

Jim Rogers new book is a must read even for those already trading commodities.

Some classic examples of out of control commodity related bull markets would be Palladium incredible price jolt from just under $200 per ounce to $1,100!

Those with properly positioned 'puts' made more on the down side of the Palladium market then many did on the bullish side.

The leading contributor to skyrocketing commodity prices are the booming Red Chinese economy, plus India's emerging economy.

Traders who went out one year in Crude Oil 'call' contracts back in Oct-2003, picking up dirt cheap $45-$50+ 'calls', when crude had sunk back to $30ish a barrel, cleaned up profit wise since oil rocketed from $30 to over $50 a barrel in less than a year's time! Each penny up/down in oil is worth $10. Recent one day moves either up or down have seen oil clinb or fall 100 to 250 pennies worth in a single trading session!

Crude Oil chart

Currently there is serious profit taking in the crude oil market possibly sinking price levels to the mid to low $40's per barrel. The lower the prices falls the cheaper calls will become in the $50 & low $60 which should be viewed as have very favourable profit potential over the longer term since there are OPEC problem producing nations out there such as 'nuclear' Iran, communist Hugo Chavez' Venezuela, and unstable Nigeria, plus Indonesia, Saudi Arabia & Iraq. Major pullbacks in crude should be viewed as buying opportunities especially if oil drops below $40 a barrel.

Copper prices for example, at the end of 2003 were fluctuating between 68 & 72 cents. Red China's strong appetite doubled the price Copper chart

Aluminum is another construction winner. Platinum has more than doubled over the last 4 years Platinum chart

The Euro has shot up from roughly 85 cents in 2002 paired off against the U.S. Dollar to $1.35 recently, but the current price level has reversed a little to $1.28 which is assisting the U.S. Dollar back into possible bullish territory. Note the slight upward curve in the Dollar this chart, although she is still stuck in a sideways mode.

Coffee has been doing wonderful on the bullish side, doubling in price for the last 6 months. Coffee

A top may have been place, too early to be definite.

All those devastating Florida hurricanes gave Orange Juice a nice shot in the arm from near record low prices last season. Orange Juice

Another currency which has shown incredible profits for those with longer term 'calls' since 2002 has been the British. Pound. Lately the Pound has been in range of $1.86 to $1.92 against the U.S. Dollar.

What you stated is so true. "Like all bull markets, there will be pullbacks. Nothing goes straight up or straight down."

Once Red China really begins to feel the adverse effects of petrol fueled inflationary spiral the boom in certain commodity markets will crash quickly such is in the construction metals and even grains to a degree. We may already be witnessing some metals price pullbacks.

[kinghorse]

escalating commodity prices is the ball carrier for the first leg of a bull market. Technology carries the ball last before the correct.

[jiggyboy]

GS is the biggest crook on Wall Street, and has been for some time. You really don't have to do any more research or trading than just waiting for their criminally fraudulent "projections" to become so outrageous that you hear them on the nightly news instead of in the internet stock sites. Then do the opposite with everything you've got in your account.

[the invisib1e hand]

Funny. I was talking with a gold trader the other day who used to work for them. he called them The Evil Empire. What with having spawned the likes of Jon Corzine and Robert Ruin, (freudian typo), I'd have to say it's a strong case.

[montag813]

Goldman Sachs analysts sent crude oil prices soaring when they said March 30 that the price could eventually reach US$105 (HK$819) a barrel.

The ONLY reason Goldman gave that absurd forecast was so it could sell its massive crude futures and oil services stocks to stupid buyers at the highs, which they did.

Anyone who believes any phony "report" from a firm such as Goldman deserves to take a bath.

[montag813]

anyway what it signals is screaming demand worldwide.

The oil bubble was 90% speculative. Demand levels are LESS than they were at $35/barrel.

[sully777]

Oil speculation never made sense bump

[sully777]

Tiger, it's like I said here http://www.freerepublic.com/focus/f-news/1377807/posts:

"To: SierraWasp; All

I don't buy all the negativity, but some of it sure is intriguing!!! (human nature, I guess)

China boom slows=oil glut=oil futures bubble bursts is a scenario lightly addressed here http://www.freerepublic.com/focus/f-news/1376091/posts.

I am not negative just positively pissed that I'm paying unreal prices based on unreal speculation that is driving our economy into the ground for the short-term profit of a few rats.

Snipped from article " Top energy derivatives trader Goldman Sachs (GS.N: Quote ,Profile ,Research ) said in a report on Thursday the oil markets might have entered a "super-spike" period, which could eventually drive prices toward $105.

'That was a pretty big call by them and the market is just assessing where supply and demand really sits,' said David de Garis, senior economist at ANZ Investment Bank in Melbourne."

Recap: Top oil trader Goldman Sachs speculates $105 (largest stake will benefit company in claiming speculation). Market is unsure (no hard facts to back up GS claim) nevertheless raises futures prices based on GS' report. Spot markets react to futures market. Gasoline prices rise based on artificial report on a futures market. Common person sees prices rise without knowing the facts behind the hikes.

Subliminal recap: Here's a raspberry (Soros) to all the kind folk (Berkshire Hathaway) that are investing (Goldman Sachs) in the oil scam to our long-term hurt ($4 a gallon in Hawaii stops tourism).

23 posted on 04/05/2005 10:19:21 AM PDT by sully777 (It's like my momma always said, "Two wrongs don't make a right but two Wrights make an airplane.")

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And you responded:

To: sully777

Re #23

The art of massaging mass psychology to make hefty sum of money. This is pretty close to getting something out of nothing.


24 posted on 04/05/2005 10:24:33 AM PDT by TigerLikesRooster

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It's also here http://www.freerepublic.com/focus/f-news/1393810/posts?page=48#48

And here http://www.freerepublic.com/focus/f-news/1382304/posts?page=27#27

And here http://www.freerepublic.com/focus/f-news/1393777/posts

And here http://www.freerepublic.com/focus/f-news/1388012/posts

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Watching and waiting for the pop. My profits are low and I can't afford to raise prices so I can lose all my customers (cut off my nose to spite my face).

[sully777]

Once China completes its Three Gorges Dam (which is infrastructure not ecomomic vitality) all materials necessary for its success will no longer be needed. The market must adjust to the newer and lower demand.

In other words, word to tthe wise, we've peaked. FReep investors should back out ASAP from further investments in commodities (unless they play short) or find themselves holding the bag.

I don't know if I'm reading the oil futures correctly, but back in the early winter, futures were trading at $25-28 for the FY2006 and 2007 based on then current stockpiles and production. Now that we see an emerging glut, am I correct in assuming a lower price than 25-28 (allowing for free flow of commodities as the rule)?