Commodity Trading & Trend Following

Pretty strong words were used by the prime minister of the Czech Republic,Mirek Topolanek regarding Obama’s economic plans. Mr. Topolanek holds the EU’s six-month rotating presidency. He believes that the European Union governments must avoid the type of spending ( $2 Trillion dollars) to get out of the current recession ( Depression?). His views were not widely accepted by his colleagues. Is it that Mr. Topolanek is just going through a rough time personally since he was ousted by his own parliament after a losing a no confidence vote on Tuesday?

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.

It goes without saying, nothing is safe. Banks are imploding and even gold has fallen almost 10% in a very short while. In normal times, the most time tested advice after a market decline is “Don’t be afraid.” The question is ,are these normal times? I would tend to believe not. More people lost money trying to catch a bottom or a good deal than at any other time. It seems to be a daily occurance with watchers of CNBC waiting to hear from the experts that the bottom is. The current economic situation can last for a very long time. However most people I speak with want to believe that it will be over this year or next. It makes me think of the people who left Lebananon or Cuba with a suitcase and thought they would be returning the following week. Those people are sitting on their luggages and are still in shock of what transpired.