• 5 minutes Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 11 minutes Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
  • 15 minutes WTI @ 67.50, charts show $62.50 next
  • 14 hours The EU Loses The Principles On Which It Was Built
  • 6 hours Starvation, horror in Venezuela
  • 9 hours Why hydrogen economics does not work
  • 6 hours Again Google: Brazil May Probe Google Over Its Cell Phone System
  • 6 hours Tesla Faces 3 Lawsuits Over “Funding Secured” Tweet
  • 2 hours Mike Shellman's musings on "Cartoon of the Week"
  • 19 hours WSJ *still* refuses to acknowledge U.S. Shale Oil industry's horrible economics and debts
  • 1 day Chinese EV Startup Nio Files for $1.8 billion IPO
  • 7 hours Saudi Fund Wants to Take Tesla Private?
  • 23 hours Crude Price going to $62.50
  • 1 hour California Solar Mandate Based on False Facts
  • 2 hours Oil prices---Tug of War: Sanctions vs. Trade War
  • 18 hours Saudi Arabia Cuts Diplomatic Ties with Canada
Alt Text

This Crucial Commodity Continues To Rally

After rallying more than 90%…

Alt Text

How Long Will The Lithium Rush Last?

As the race to secure…

Business Insider

Business Insider

Business Insider is one of the leading Business and finance news sites online.

More Info

Trending Discussions

Despite High Prices - There is no Bubble in Commodities

High prices do not mean a bubbles. High prices are just high prices. Humans are horrible at best in predicting either the frequency or the magnitude of such moves, yet novices (and some pros) are dazzled and entertained with the white noise of predictions. Don't be one of them.

Prediction as an art in the US is miserably unsuccessful, and unfortunately we have to deal with the endless barrage of prediction that floods our senses via social media. That is the downside of the ease of internet publishing for sure.

If you make the mistake of reading some of the recent articles that I've seen stating that we have a bubble in commodities, you may sell your longs fearing that we have put in the tops for these markets. Don't be fooled and get psyched out of your long positions. I believe it was Paul Tudor Jones who said, 'prices move first, and the fundamentals follow." As long as the price charts are positively sloped stay long.

There is a long way to go before we see the type of inflation and hyperinflation that the massive printing of US dollars can cause. There is no economist within 1,000 miles of the White House who can predict how high markets can go. After that, you can use the Sperandeo 123 Trend Reversal pattern to trade these same markets short.

Part of the problem is that the msm report price changes, and not percent changes. If wheat has doubled in price, then a 10% pull back is going to be twice as large as it had been. So if you're using prices for position sizing, you might consider trimming the position so your equity does not get whipped around. Keep in mind that this is as much an emotional decision as a financial one for you to make.

A word about short selling: if you put up 5% of the notional value as margin, all you need is a 5% move down for your to double your money or earn a 100% RoR on your position. If the number was 8%, then the same will hold. There are articles out there that have suggested that you can only make 100% by being short. That is not true and you can earn several hundred % by being short wheat, for example, from $9.00 to $4.50.

Position sizes will dictate what impact these moves have on your overall equity. In high volatility markets, as well as the potential for inflation or hyperinflation, you don't need large positions in commodity trading to earn out-sized gains. That's my prediction.

By. Michael Martin




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News