Interesting Quote

It is a painful thing to look at your own trouble and know that you yourself and no one else has made it.

~Sophocles, BC 496-406, Greek dramatist

Important Development about US Dollar: Gulf States may stop Using Dollar

The Indepedent (which was subsequently carried by Bloomberg and Others) reported that the Gulf states may stop denominating their oil exports in the US Dollar. Interestingly, one of the unstated reasons for the US invasion of Iraq by George Bush was supposed intention and attempt by Iraq (under Saddam Hussein) to start using the Euro as the denomination for its oil exports. Rest apart, if the development actually does materialise then we may be about to see a paradigm shift which would structurally alter the global economy for the rest of our lives. It could also start the inauguration of the gradual decline of the US dominance in every sphere of our lives. In other words, it could mean the end of the US Empire.

But on a pure contrarain basis, it could also (only in hindsight can we actually be sure) be the medium term bottom. Look at it this way, people are selling USD as if there will be no tomorrow.

And, remember, major turning points occur at such turbulent times. So, we could just be near, at least a short-term bottom simply because I believe that it cannot get worse than this in the immediate future.

More on this later.

Short-Term Caution on Commodities

While we continue to remain bullish about commodities over the long-term, we believe that in the short-term caution may be well advised in the commodity space (as a whole). We continue to hold that while Gold is a good buy on substantial declines, the rest of the space, especially base metals seem ripe for a sharp correction.

Commodities have a tendency to witness very sharp corrections, so dont be unduly worried. If you are the one who incessantly worries about such sharp corrections then the commodity space is best avoided.

The chart below provides a graphic representation of the US Commodity Open Interest (as published by Bloomberg).

(Click on the Image to Enlarge)

While we would like to avoid particular recommendations, we decided that we would like to make an exception

It is imperative to note that at the present juncture, on a purely technical basis, we believe that commodities like copper may witness selling pressure once it falls below US$260. The first sign of trouble will be hinted once it falls below 264 and 262.

In case of short-term gold speculators, it is prudent to note that our post about Gold a couple of weeks back is still valid. In the very short-term, speculative long-positions in gold could be contemplated once it cross 1007 and 1011. On the downside, very short-term speculative short positions could be contemplated once gold falls below US$1000. But, keep in mind that the interesting development that gold is not closing below US$1000. Below 1000 major supports are at 997, 990, 987 and 982.

Please note that our bullish long-term stance in the commodities being in a secular structural bull-market with cyclical bear-market corrections remains intact.

Margin Debt on NYSE in 2008

The following table provides details about Margin Debt on NYSE on a monthly basis in 2008. The Debt is in US$ millions.

Click on the Image to Enlarge

Margin Debt on NYSE in 2007

The following table provides details about Margin debt on NYSE on a monthly basis in 2007. The Debt is in US$ millions.

Click on the Image to Enlarge

Margin Debt on NYSE in 2002

The following table provides us with the overview of margin debt on NYSE in the Year 2002. The Debt is in US$ millions.

Click on the Image to Enlarge

Margin Debt on NYSE in 2001

The following table provides us with the overview of margin debt on NYSE in the Year 2001. The Debt is in US$ millions.

Click on the Image to Enlarge

Margin Debt on NYSE in 2000

The following table provides us with the overview of margin debt on NYSE in the Year 2000. The Debt is in US$ millions.

Click on the Image to Enlarge

Deciphering the Riddle of Liquidity & Rally

Every day we hear that the boom since March 2009 has been driven by 'liquidity'. This shrill has become all the more pervasive with the recent rally in the markets. We keep asking the question what has induced such a strong rally (apart from the usual factors such as government support as well as other technical factors). So I thought the best thing would be to research how far argument is actually backed up by solid statistical evidence. I decided that I would dig out statistics from different sources and try to find out a macro-argument for or against liquidity inducing this rally. I looked into ICI statistics and also the statistics put out by the US Federal Reserve Money Stock Measures (in billions of dollars as on 1 October 2009) and the ECB and tried to analyse (with an open mind) which way the liquidity riddle.

I kept reminding myself that liquidity is a ubiquitous but double edged sword and probably the easiest way to unfathomable market movements. I consider this posting to be part of a longer-term research in progress wherein we would like to track the flow of liquidity into different asset classes and consequently the socio-economic impact of this process.

At the outset, it is pertinent to remember that this rally directly or indirectly has the blessings of the governments the world over for the simple reason that a rally of this magnitude goes a longway in reducing the leverage on the balance sheets as well providing succour through rising assets on the books of the beleagured financial institutions of the developed world. The statistics and charts provided in this post clearly indicate that money supply creation may have slowed (at least in the USA) at best and that itself could be a red flag. Recent reports by Bloomberg claims that the European Central Bank has actually given lesser number of loans than expected.

Another argument that we can put forth is that the rally became possible (apart from the usual conspiracy theories) is not because of liquidity that has been created due to investors becoming risk averse but instead it is largely due to money that originates in the global central bank emergency measures. The results of Goldman Sachs and others clearly indicate that trading has become an important part. So we looked up statistics about margin lending and it gives credence to the view that private pools of capital are warming up to leveraging once again. Margin Debt has been increasing. This is not to claim that they were not interested in borrowing, just that there were no lenders.

It becomes increasingly difficult to argue that the rally in the equity markets worldwide was largely because of growing willingness on the part of various segments to take on more risk, or risk aversion abating. That story may only be partly correct. It becomes increasingly difficult to argue that the rally was driven by money coming out of the US Money Market funds. A small part of it may have come into the markets. The chart below clearly illustrates the fact that money on the sidelines has come down, but it is equally important to note that not all of it would have come into equities.

It has been pointed out that the amount of money shot up in the aftermath of the Lehman Crisis. The chart below show that it increased from about US$3.399 trillion to about US$3.922 trillion. A commonly held view is that a part of that is coming back into the equity markets. The Chart below (from Bloomberg) clearly indicates that even before the crisis began the amount of money in US Money Market Funds in mid 2006 was about US$2.038 trillion and after the problems with Bear Stearns in March 2007 it was about US$2.432 trillion. In early September 2008, just before Lehman collapsed it was US$3.585 trillion. Two days back it was about US$3.425 trillion. This indicates that the jump was approximately about a US$1 trillion after the problems began.

Please Click on image to expand Image

It is important is that we have to note that about US$190 billion moved into commodities, approximately US$220 billion dollars moved into bond funds.

That leads us to the important question: what led to this huge rally? Invariably short-covering played a part. But that is not to be over-emphasised. More important is the money printing as indicated by the US Federal Reserve statistics given in the table below.

We have to assume that a part this money did flow into the various markets as banks are not lending it to consumers (as some of our other posts have shown). A part of the money did go into covering the losses of the banks, while it is likely that a large component is simply being hoarded by the banks due to either uncertainty in the economy or uncertainty over their own capital requirements to cover losses in future.

The rally (in the equity markets) seems to have been fuelled by equity mutul funds putting some of their cash back into the market. The table below (from ICI) shows that the cash position of the US equity funds have largely been reduced thereby creating additional demand.

August 2009	July 2009	August 2008
4%	4.2%	4.5%

The following table provides us with Net New Cash Flow of Money Market Funds (In US$ million)

August 2009	July 2009	YTD 2009	YTD 2008
-53,788	-48,325	-291,1782	339,548

Source: Investment Company Institute

One important source for the equity rally in the US has been the increase in margin debt as shown by the table below. It provides us with the annual average of margin debt for the years preceding 2009, while for the current year monthly statistics have been provided. This indicates that a large part of the rally has been induced by speculators (likely to be hedge funds) borrowing money to buy stocks. Interestingly ICI statistics show that US based equity funds have only seen inflows to the tune of about US$65 billion in 2009. In contrast the Bond funds have seen inflows of nearly US$220 billion, indicating that money moving out of the money market funds is going into bond and commodities and even emerging markets rather than US equities. Emerging market funds have seen inflows only to the tune of about US$9.68 billion on a net basis. Hedge funds on the other hand have seen inflows. Added to that is the leverage that has been built with banks lending only to them and their borrowing on the basis of margin debt. One could also add that in almost all the countries we have seen a large amount of money being pumped into the system, a large part of this invariably has entered the markets (all of them for financial speculation). A number of reports indicate this has largely been the trigger for the rally in countries such as China. The fact that a number of investors (especially mutual funds) putting some part of the cash cannot be overlooked, but should not also be overemphasised.

Year	Average Margin Debt on NYSE
2000	243,448
2001	164,550
2002	141,003
2003	150,190.8
2004	183,287
2005	207,166.7
2006	239,572
2007	331,554.2
2008	285,168
2009 January	177,170
2009 February	173,300
2009 March	182,160
2009 April	184,120
2009 May	189,250
2009 June	188,140
2009 July	199,460
2009 August	206,720

All the above figures in $ Millions
Source: NYSE

The above analysis hopefully provides greater clarity about the the source of the rally. The important question that we need to ask is how long will the liquidity last? The short answer is that is not likely to last long (at least not beyond the next two or three months) unless the US decides that the weakness in the economy needs another round of stimulus of various kinds. That is probably one of the reasons what the commodity market is sniffing.

We would believe that most of the money that would like to enter the equity markets has already entered the equity markets and the role of liquidity is probably being overhyped. There is probably more selling that is likely rather than the other way round. Insiders are selling quite aggressively, while the investment herd seems to be buying.

While our analysis may be full of certain generalisations, we think this could be a good starting point to carry out further research and debate on the issue. Hopefully others will add to the debate.

History of Bubbles: The South Sea Bubble

As a student of history one cannot but marvel about the nature of human mentality and human emotions. Nowhere is this more visible than when it comes to investor behaviour in the financial markets. The history of bubbles goes back hundreds of years (at least). The remarkable similarities of bubbles starts with each generation of people believing that they are living in an era of great technological change that generations before them had never witnessed. These "revolutions" probably first started with the ability of humans to use fire, then the ability to harness the wheel, maps, industrial revolution, the invention of the steam engine, telephone, electricity, railways, (may not be in that order though). In recent years the ostensible reason for elation has been technological change that invariably leaves us spellbound. The list is exhaustive.

These 'revolutions' invariably leave in their legacy of euphoria amongst the investment community and every few years we have a new fad that becomes the rage. There are a number of interesting manifestations of these manias or in investment terminology - bubbles - are the eerie similarity and their amazing simplicity. Often, in retrospect one may be forgiven to wonder how normally rational, intelligent investors could fall for such a simple illogical investment theme.

A common trait of most of the bubbles is the fact that nearly all of them characteristics that are remarkably similar in the way that they have operated through the ages.

I thought there would be no better way than to go back and research about the past bubbles from what contemporary observers (who kept their sanity) had to say. There is no better book to back to than Charles Mackay’s Extraordinary Popular Delusions & the Madness of Crowds, first published in 1841. However, writing about each of the bubbles will be my priority but due to time constraints, I thought it would be best for me to reproduce parts and pieces from different bubbles that he has documented and try to dig up similarities with bubbles that I have been observing since 1993.

Over a period of time, I have found that the best way to observe the formation of bubbles is when people in a different line of activity start taking notice of returns in a particular asset class. We opine that the greater the attention from non-professional investors, the greater the validation that a bubble has started to expand. A classic instance of a bubble was in 2000: It was reported by Marketwatch website (then http://www.cbs.marketwatch.com/ in a story titled “Buffett defends his tech aversion on 29 April 2000) that a ten year California girl demanded an explanation from Warren Buffett (considered to be one of the most successful investors of the present) during their Annual Shareholder meeting as to why he avoids technology sector.

In this post, I will highlight some important quotations about bubbles and Mackay’s observations. The South-Sea Bubble is one such classic bubble.

The South Sea Company was established in the year 1711 by Harley, the Earl of Oxford. The company was formed to restore public credit which had suffered due to the dismissal of the Whig Ministry. A company of merchants decided that they would assume the debt themselves and in return the government agreed to provide them with certain duties in lieu for a certain period of time at an interest rate of six percent per annum. A monopoly of trade was granted by the British Parliament. The amount of debt that this company of unnamed merchants would assume amounted to nearly ten million sterling, a considerable sum in those days. The interest rate was reduced to five percent from six percent in 1717 on the request by the company.

Reports then surfaced that the company was to be granted four ports in South America by Spain so that it could trade in gold, silver and slaves. These rumours held ground despite the Philip V of Spain having no intention to grant free trade concessions to the British. The Company was granted permission to increase its capital. To cut a long story short, during the course of the debate in parliament about extension of benefits to the company, the stock price exploded due to speculation.

A speaker (Walpole, the only one who spoke against the company) had the prescience to warn in parliament that, ‘the dangerous practice of stockjobbing would divert the genius of the nation from trade and industry. It would hold out a dangerous lure to decoy the unwary to their ruin, by making them part with the earnings of their labour for the prospect of imaginary wealth….’

The parliamentary debate over the bill took two months and in the meantime the stock was the magnet of speculation. The stock rose from about 100 to about 400 and then settled near 330 by the time the bill was passed by the House of Commons. At its height the stock reached a high of 890. A large part of the speculation was driven by rumours that claimed that the company would grow exponentially. Among others, an interesting rumour was that the Earl had received overtures in France from the Spanish government that they exchange the company Gibraltar and another port for some places on the coast of Peru.

On April 12, five days after the bill was passed the company decided to issue fresh shares to the public. The bids received were nearly two million more than the existing capital. Even the Prince of Wales decided to invest about 40,000 of his own money. This boom led to more companies being formed to trade.

Mackay points out that there were nearly a hundred different projects were formed. This is eerily similar to our present day bubbles. Hundreds of companies decide to raise capital from the public: all to monetise the prevailing investment fad. During that era, it was estimated that nearly three hundred million sterling was raised from the public for dubious ventures (p.68). Among the ventures for which money was raised included:
Establishment of a company to make deal board out of saw-dust
Establishment of a company for encouraging the breed horses in England, and improving glebe and church lands, and repairing and rebuilding parsonage and vicarage houses.
A company for carrying on and undertaking of great advantage, but nobody knows what it is.

Once the bubble burst, the following is the list of some of the companies that were declared to be illegal. Mackay lists nearly 85 different companies that were declared illegal and abolished. Amongst them the interesting ventures were:

1. For the importation of Swedish Iron

2. For supplying London with Sea-coal

3. For building and rebuilding houses throughout all England

4. For effectually settling the island of Blanco and Sal Tartagus.

5. For improvement of lands in Great Britain

6. For Purchasing lands to build on.

7. For Trading in Hair
8. For erecting salt works in Holy Island
9. For carrying on an undertaking of great advantage; but nobody knows what it is.
10. For paving the streets of London
11. For furnishing funerals at any part of Great Britain
12. For insuring of horses
13. For a grand dispensary
14. For improving the art of making soup
15. For a settlement on the island of Santa Cruz
16. For improving of Gardens
17. For drying malt by hot air

Once the stock collapsed, it was pointed out that the wealthy of yesterday became the beggars of today.

Source: Charles Mackay (1841), Extraordinary Popular Delusions & the Madness of Crowds, Three Rivers Press, New York, Reprint 1980.

News Headlines from the Great Depression

1929-1932 Headlines

September 1929“There is no cause to worry. The high tide of prosperity will continue.”- Andrew W. Mellon, Secretary of the Treasury.

October 14, 1929“Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending, which had been based on a mistaken interpretation of a review of industrial and credit conditions issued earlier in the day by the Federal Reserve Board.”– New York Times

October 29 1929
Stock market crash

December 5, 1929“The Government’s business is in sound condition.”– Andrew W. Mellon, Secretary of the Treasury

December 28, 1929“Maintenance of a general high level of business in the United States during December was reviewed today by Robert P. Lamont, Secretary of Commerce, as an indication that American industry had reached a point where a break in New York stock prices does not necessarily mean a national depression.”– Associated Press dispatch.

January 13, 1930“Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today.”– News item.

January 21, 1930“Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed the tide of employment had changed in the right direction.”– News dispatch from Washington.

January 24, 1930“Trade recovery now complete President told. Business survey conference reports industry has progressed by own power. No Stimulants Needed! Progress in all lines by the early spring forecast.”– New York Herald Tribune.

March 8, 1930“President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days.”– Washington dispatch.

May 1, 1930“While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity.”– President Hoover

June 29, 1930“The worst is over without a doubt.”– James J. Davis, Secretary of Labor.

August 29, 1930“American labor may now look to the future with confidence.”– James J. Davis, Secretary of Labor.

September 12, 1930“We have hit bottom and are on the upswing.”– James J. Davis, Secretary of Labor.

October 16, 1930“Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment.”– Charles M. Schwab.

October 20, 1930“President Hoover today designated Robert W. Lamont, Secretary of Commerce, as chairman of the President’s special committee on unemployment.”– Washington dispatch.

October 21, 1930“President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter.”– Washington dispatch.

November 1930“I see no reason why 1931 should not be an extremely good year.”– Alfred P. Sloan, Jr., General Motors Co.

January 20, 1931“The country is not in good condition.”– Calvin Coolidge.
June 9, 1931“The depression has ended.”– Dr. Julius Klein, Assistant Secretary of Commerce.
August 12, 1931“Henry Ford has shut down his Detroit automobile factories almost completely. At least 75,000 men have been thrown out of work.”– The Nation.

July 21, 1932“I believe July 8, 1932 was the end of the great bear market.”– Dow Theorist, Robert Rhea.

More Links for Great Depression Era Headlines

http://www.jolietpubliclibrary.org/Digitization%20Projects/The%201930s/Depression.htm

We Never Learn from History - Interesting Quotes

A friend suggested that some interesting quotes should be put on the site. Most of these quotes are those that I have come across or those that friends have sent me. Wherever possible I will acknowledge them

Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one - Charles Mackay

Insanity consists of doing the same thing over and over again and expecting the same results

Discovery consists of seeing what everybody has seen and thinking what nobody has thought”
. . . Albert von Nagyrapolt, The Science Speculates

“The main purpose of the stock market is to make fools of as many men as possible.” – Bernard Baruch


Interesting Headlines from the Past:

August 28, 1930:
There’s a large amount of money on the sidelines waiting for investment opportunities; this should be felt in market when “cheerful sentiment is more firmly entrenched.” Economists point out that banks and insurance companies “never before had so much money lying idle.”

September 3, 1930:
Market has now reached resistance level where it ran out of steam on July 18 (240.57) and July 28 (240.81). Breaking through this level would be considered a highly bullish signal. General confidence that this will happen based on recent market action; many leading stocks have already surpassed July highs. Further positive technicals seen in recent volume pattern (higher on rallies and lower on pullbacks), and in continued large short interest.

Some wariness based on recent good rally recovering all of drought-related break; some observers advise taking profits on at least part of long positions, to be in position to rebuy on good pullbacks.

Most economists agree business upturn is close; peak in business was reached July 1929, so depression has lasted about 14 months. “Those who have faith and confidence in the country and its ability to come back will profit by their foresight. This has also been the case over the past half century.”

Harvard Economic Society points to steady rise in bond prices as favorable for stocks. Says there is “every prospect that the [business] recovery … will not long be delayed,” although fall period may not be strong as expected. Notes worldwide decline in business, but 1922 recovery demonstrates U.S. due to “great size, natural advantages, and diversity of conditions … can lift itself out of depression without the stimulus of improved foreign demand.” “We only know now with perfect hindsight what these pundits did not know back then - that there was another 80% of downside left in the bear market.”

Mirage of Recovery

The US Federal Reserve released statistics about the US personal savings rate (and disposable personal incomes) that clearly point to a problem that is far from being solved. The chart below illustrates the magnitude of the collapse in incomes. While there is a recovery from the recent lows, it is amply clear that the incomes are far from what would be healthy for a sustainable recovery. The importance of the fall should be seen in the context that the personal consumption now accounts for nearly 70 percent of the GDP, while manufacturing consists of probably the remainder. It would be erronous to see the present economy with that of the previous times as during the 1980s and 1990s consumption accounted for less than 50 percent.

Click on the Image to enlarge it

A large part of the jump could be due to the jump in incomes of that could be short-term including tax cuts/refunds, rise in minimum wages and also income that accrues to the well to do due to rising asset prices (if it is actually working), which are unlikely to be sustained.

The chart below (in billions of US Dollars) clearly illustrates that the problem there seems to be no rise in personal incomes on a long-term basis. Recovery in incomes seem to far from certain as the US economy is still losing jobs (job losses in September were more than most of the forecasts). Recent reports claim that a large proprtion of people with income of about US$100,000 per annum have little savings. Nearly 70 percent of the households are living on pay-cheque to pay-cheque. More worringly, about 35% of the households that make US$100,000 are living on pay-cheque to pay-cheque. So about half of the US population can go bankrupt if they dont have income for one month.

Click on the image to enlarge it

The charts are as on 1st October 2009.

Crude Oil Fibonnaci Retracement Levels

In the commodity stable, Crude oil charts seem especially interesting. So we thought we would simply leave the chart of crude oil and the Fibonnaci chart in its raw form and let our views take the call.

The following are the Long term Fibonnaci Retracment levels on the Weekly charts

Please note that the levels are rounded off to the nearest higher number

1984- 2009 (Sept 15)
Low: 9.74 (April 1986)
High: 147.27

61.8% Level	50% Level	38.2% Level	23.6% Level
76.20	90.07	103.22	120

As on 22 September 2009
Source: CFTC

SILVER	All Open interest	Long Positions	Short Positions
Producer	171,065	8823	72596
Managed Money	171,065	45427	1109
Swap Dealers	171,065	15077	21480

GOLD	All Open interest	Long Positions	Short Positions
Producer	628,409	52,699	246,474
Managed Money	628,409	215,058	825
Swap Dealers	628,409	29,950	144,117

COPPER GRADE 1	All Open interest	Long Positions	Short Positions
Producer	117,689	3,851	41,492
Managed Money	117,689	19,009	18984
Swap Dealers	117,689	57,188	18,187

Watch out: Bubbledom Elite are changing their views

A very interesting change seems to be taking place. Over the past few days, important segments who we believe are the elite of the bubbledom have slowly embarked on their journey to hedge their reputations. We could speculate on the reasons.

One, apparently is that they have immensely profited from the 6 month rally, they must have sold all their stocks that they were stuck with or they had averaged at the low. Then there is another factor. End of the year is traditionally a time for bonuses. So they better cash out quickly or they will not get real cash. This real cash is better than securities, which are even more worthless than US Dollars. At least the US dollars can be quickly sold or converted to cash. Imagine somebody paying you with structured products which cannot be sold. I know the problem as I have some such securities (though they are equities). Another reason for this change of heart could be that they are simply trying to hedge their reputations and positioning themselves for a "I told you so" period sometime in the future.

Coming back to the point, over the last two days we have seen Greenspan claiming that the US economy's growth will weaken in 2010 on Bloomberg (See the Video) and then Goldman has started to hedge their views. It has started with easiest indicator to track - US Employment.

It now says that its estimate about US losing 200,000 jobs in September is worng and instead the US Economy may have lost 250,000 in September (Bloomberg). I am quite sure this is the start of their slow shift into a bearish stance. It could also be a prelude for smart money to postion themselves for a large fall (this large fall may not be a few days affair it could be a gradual slide down over a period of time as investors/people become increasingly skeptical about the mythical green shoots. We may have to reserve our judgement about the intentions of those behind green shoots logic out of academic etiquette.

Let us simply turn our back on the debate on whether there are green shoots (at least on our blog) . Suffice to say that it is likely to say that there will be no meaningful recovery (if at all we can call it a recovery in the first place) till at least till the end of 2010. It is likely to go beyond that. As for reaching the output of the peak era, I would think it could be beyond 2012. We have the finance chiefs of EU saying that they are unlikely to remove the stimulus measures till 2011. What more evidence do we need?

What should we do? We believe that it would be best to buy insurance. The fact that October has traditionally been one of the most volatile months is a sufficient reason to buy this insurance.
See the chart of VXX and VIX below. Technically both of them are screaming text book buy cases (Disclosure: I have been telling my friends, and some of them have bought VXX).

CLICK ON THE CHARTS TO ENCLARGE THE IMAGE FOR A BETTER VIEW




The Chart of VXX is especially interesting as it has seen a steady increase in volumes as the Dow peaked near 9500 over the past two weeks.



Readers need not get too disappointed. All these actually means that our view that commodities will be the business to be in is being validated with each passing day. So prepare yourselves for the coming winter (need not necessarily be a storm), the aftermath and the sunshine. Only that we should all be cautious. Rest assured, we will always be there to give you our objective views since we are traders.