Thursday, May 5, 2011

Commodity Liquidation

You saw the funds just eject a load of Crude oil, gold, silver, and any other liquid commodity just a while ago. This looks like your garden variety scary pullback in a bull market uptrend. Pullbacks are supposed to be SCARY, otherwise they wouldn't happen. Stocks and commodities go on sale when there is fear, not when everything is fine and everyone is just saying its a correction. The ECB triggered this selloff, but what they said was actually a positive for commodities because they are more dovish. But with everything linked to the dollar carry trade, you saw unwinding. It was liquidation, nothing fundamental here. I believe we will rocket higher next week after all this dust settles.

4 comments:

Anonymous said...

3% move lower in just 4 days!

Anonymous said...

intc is up like 12 days in a row..

Anonymous said...

by emerging markets... deflation is back and these mkts had too much inflation... sub $100 oil will be just fine for China and India... India a record number of down days for near past 20 years today... will fly tomorrow buy INP

Anonymous said...

I'm thinking of slv for a trade..maybe when it hits 30-31.