Friday, June 05, 2009

Murky out there

We have a tough time making money on days like today.  Why?  Because the movement seemed random, technicals weren't really respected (stocks would go through sup/res lines like they were invisible), and usual correlations were not respected (USD was firm/gold was killed,  but treasuries were down?)

Our guess is that the easy tape we've seen in the last few months is going to give away to more confused and choppy action.   Oil from $35 to $70 was a much easier move than it will be from $70-$140.   We're going to hit a mountain of supply as commodities reach more fair pricing and rates inch up.      

So what to do?  Even though the bull trend is still intact, we think that we'll be returning more to a stock picker's market rather than just buy any commodity and watch it rip higher.    

It could still be early for this call but we strongly believe that this will be the beginning of the next period in the market.     As always, time will tell.