Sand Spring Advisors LLC
A Potentially Nasty Structure: CRB
February 10, 2002
by, Barclay T. Leib
Within the commodity complex we have previously been long gold and now consider ourselves flat. We also previously espoused a bullish looking reversal pattern under way in soybeans. But to date, soybeans have done little but meander.
Could we have gotten the gold move right, but end up being wrong on soybeans? It wouldn't be the first time something in ag-land threw us a curveball.
Indeed, just to play devil's advocate a bit as a way to advise caution, look at the two charts above. The one on the left is the way the Nikkei has declined to date. The one on the right represents the CRB decline over the past several years. Although far from a perfect "pattern match," could it be that the weak Nikkei has delivered us a "roadmap" so-to-speak for new lows still ahead on the CRB?
In our hearts we hope that is not the case, but we have to allow for this possibility. After all, Japan -- via its weak yen policy -- is effectively working to export their domestic deflation to other countries. Thus a bit of economic causality may even exist between these two charts: the lower the Nikkei goes, and the higher dollar-yen trades, then the weaker global commodities become -- transpiring simply on a lagged basis. Soybeans are specifically in the process of piling up in Argentina as a "poor man's gold" desired by merchants and farmers as a safe-haven asset to hold during that country's ongoing monetary crisis. But someday these beans will of course hit the market.
So before subscribers start to lose any money on our previously bullish soybean advice, we think it important to "scratch" that trade for the moment, and take our commodity chips off the table here for a bit. We want to just watch the price action of soybeans and the CRB a bit more. We'd love to eventually see the CRB turn higher, but with gold already into its resistance zone, and the potentially ugly "pattern match" above, we do not wish to be caught "willing" a rally to occur before the time is actually ripe for such to occur.
How Your Articles Are Delivered
Upon the processing of your credit card or the receipt of a personal check, Sand Spring will e-mail you the articles requested as a Word attachment, and also provide you with a WWW address and password to view the article on the web without using Word should you so desire. Confirmation of your order will be immediate, and the actual article will follow by e-mail typically within a few hours and in all cases before the opening of NYSE trading on the following day.
Ordering by Credit Card:
Our shopping cart is designed for both physical and subscription products, so do not be confused too much when it asks you for a shipping address. A correct address is important only for credit card authorization purposes. Your e-mail information is the most important piece of information to us for proper delivery of your article(s).
Disclosure Statement
Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.
If you order by credit card, your credit card will be billed as "Sand Spring Advisors LLC"
973-829-1962 or by email at the address below:
Take me back to the Sand Spring Home Page
Comments or Problems
Thank you for visiting Sand Spring Advisors LLC, Inc. We hope to hear from you again soon. For more information on Sand Spring Advisors actual programs, services, or to request a copy of a Disclosure Document, please phone us at 973 829 1962, FAX your request to 973 829 1962, or e-mail us at information@Sandspring.com
| Corporate Office: 10 Jenks Road, Morristown, NJ 07960 Phone: 973 829 1962 Facsimile: 973 829 1962 |
Best Experienced with
Click here to start.
The material located on this website is also the copyrighted work of Sand Spring Advisors LLC. No party may copy, distribute or prepare derivative works based on this material in any manner without the expressed permission of Sand Spring Advisors LLC
This page and all contents are Copyright © 2000 by Sand Spring Advisors, LLC, Morristown, NJ