Commodity Trading & Trend Following

Everyone would love to know what would be the outlook for the commodity markets and commodity trading. After a roaring 2007 and 2008 it seemed that commodity trading advisors would know no limit. The stock markets collapsed in 2008 and fear was rampant through out the world. During the turmoil when virtually every strategy lost [...]

The FED and the TARP program has lent or guaranteed almost $12.8 trillion if you add it all up. Putting this into perspective this massive sum is virtually approaching the total GDP or everything produced in the US last year. The nationג€™s gross domestic product was $14.2 trillion in 2008.

Very clearly there was extreme dissatisfaction over big bonuses paid by firms bailed out with U.S. taxpayer money. Is it hard to understand why when people are losing their jobs, houses or even hope. It is ironic when a salary of $100k is considered a great salary for someone in Iowa and bonuses in the $100 of thousands or even millions were given to incompentents.

A very interesting thing has been happening slowly slowly. Oil has started to rebound. Are we in store for more Peak Oil scares ( reality). Unfortunately I nor anyone knows where Oil is going. But what I do know is that Oil was one of the strongest commodity movers last week on a relative basis. From the lows of Feb 19th Oil has made a tremendous move. The question is will it continue? For the week Oil is up approx 10.7%. Seems that many are seeking reasons… maybe it was the result of the FED action and the fears of a weakened dollar or inflation. Reasons are redundant for traders. The fact is Oil moved. The next question is how to put on a low risk trade? As a Trend follower, one becomes interested but only if they can put on a low risk trade.

What words can describe the current situation? Fear…Dispair… Disbelief..Hopelessness…? I am sure not everyone feels these feelings…but I would tend to believe a great many do. People are afraid of losing their jobs and with good reason. Many people are only a paycheck or two away from default. The mood of the country is surely down. Amplifying the mood has been all the expressed anger about bailing out banks and financial institutions that made poor decisions. Putting salt on the wound was the bonus-paying spree to the incompetents at insurance giant AIG and Fannie. Now billions of dollars are being promised to the auto industry. Where does it end? Will this really help the economy or is it another bailout where those who asked for bailouts came in their private jets.

Do I really need to remind you that the US stock market is at 12 year lows. Is it my imagination or is the FED trying to wing it. Is it my imagination that the most people are starting to not trust virtually anything. You tell me… but this week … new gyrations are being felt in the mortgage markets and bond markets. Institutional investors are starting to worry that the FEDs repeated modifications to its financial-rescue packages are undermining the very foundations of investing: the right of creditors to claim their assets first if a borrower defaults. If you were a lender, would you make a loan if the courts can change your mortgage agreement. This is exactly what is happening in courts through out the US.

What is happening to the USA’s Triple A Rating?