Dennis Gartman predicts massive waves of selling in commodities

Quote from libertad:

Excellent Commentary All
...................................................................

One should think of all the components of why prices
have moved the way that they have....and in particular what is different than the way things used to be a few years ago....

Speculation
Investment
Geopolitical
Actual demand changes
Supply raw materials
Supply material in process
Supply finished product
Government legalities and mandates


The list gets longer....


Then one should note what portion of the price changes are
due to which item....

This is why there is so much confusion....

To be sure....the solution is not amongst journalism....
More...

Hah, your last point is spot on.

Can we also mention that people were saying it was speculators, when oil was a mere $40 per barrel.

Do they still think that speculators have added $100 per barrel to the oil price? Cmon, that is moonbat crazy.
 
Gartman knows that 95% of commerce that is getting slammed by manipulations of markets from cotton to oil have HAD IT, and are demanding that the regulatory and law enforcement authorities do something about it now, before they go public themselves.

I'm talking about companies such as the automakers, textile manufacturers, airlines and even those companies that are doing quite handsomely, such as the railroads.

When this breaks, no economist will be able to calculate how much money was stolen from businesses and consumers through outright manipulation of supply data.

Gartman is making a very noisy suggestion here because he will look like a freaking genius when commodity markets crash. The slime probably was completely in on it while the manipulation was at its fevered pitch.

PEAK OIL MY ASS.
 
Long trends often end in parabolic price rises signifying the end of the trend. This is one of the most reliable patterns I have seen.

Yes, its possible oil shoots up another 20 dollars to 150 or so, but time wise we are nearing the end of the rally. six months from now I would guess were closer to 80 dollars than 150.
 
Prosecutions Possible

Michael Greenberger, a former head of the CFTC's Division of Trading and Markets, said the agency is likely to find that some investment banks, hedge funds and wealthy individuals manipulated futures prices. Traders may face prosecution if they reported false prices or made offsetting trades designed to manipulate the market, he said.

``There will be a lot of administrative and criminal litigation before the sun sets on this,'' said Greenberger, who teaches law at the University of Maryland.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aGzRMmD_b9MA&refer=home
 
Quote from Cutten:

This is partly why I am long Brent crude not WTI. However...

Position limits don't apply to cash commodities, or non-US commodities. A position limit makes as much sense as a position limit in cash treasuries or a individual stock i.e. none whatsoever. Besides, pension funds will simply switch offshore to circumvent the rules, or purchase physical stock instead. If anything, position limits should be abolished, and replaced with a "market manipulation" law to prevent artificial squeezes. The position limits rule is a quirk of US futures trading - Eurex for example has no position limits, since they actually believe in free markets, unlike the US futures regulators & exchanges. LIFFE has no position limits. I don't see any vast manipulations occuring in London or Frankfurt, as opposed to the US. All I see is artificial restraint of trade. In any case, each exchange already has the power to impose high margins, or liquidation only trading, as they did with the Hunts in silver - that was pretty effective.

Gartman is also a bit late predicting selling in commodities - all commodities except energy have *already* sold off a lot since March. Oil will eventually top out and then get hammered - with or without any rule change.

Even if you totally disagree with all the above, it remains an indisputable fact that making trading decision on the basis of what the government *might* do at some vague, undefined point in the future, is not a profitable strategy. This advice of his is totally unactionable, and therefore totally useless.
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Cutten, i have to say that i completely agree with your post. Those foolishly shorting here will furnish the fuel to drive commodity markets back up. I don't expect much retracement in commodities until the Fed begins to tighten, the dollar strengthens significantly and inflation begins to cool down. Right now we are in an extremely inflationary environment. I just don't see commodities coming down a whole lot more in that kind of environment. It is way too early to expect the commodity "bubble" to suddenly burst, but naturally talk of such will bring down markets a bit and furnish entry points for the next wave of buying which will be accelerated by the too early shorts.:D
 
smart money is always selling into parabolic rallies.

The markets shape the fundamentals not the other way around. This is very important to understand.
 
Quote from JamesVU2000:

......

The markets shape the fundamentals not the other way around. This is very important to understand.
More...

James - Help me understand the above comment?

The premise being trotted out in is that "index" speculation has skewed price discovery mechanisms in oil markets. My limited understanding is that pricing is typically quoted against a number of commonly accepted "benchmarks" (WTI, Brent, Dubai). Futures markets exist primarily to transfer risk between cash market commercial participants.

Spot market transactions are driven by intra-regional price differentials, transportation costs, storage costs, etc. I think the relationship between these variables is much more interactive than being one way purely driven by price alone. All participants are driven by profit motive and their behavior is marginally constrained by regulations. Competition is the only real factor which acts to limit collusion.

Please paint your picture of how markets shape fundamentals.

To me the core question is whether a significant rise in speculative positions has skewed price discovery or not?
 
gartman said we'd never see $4 copper again in his lifetime. :eek: :confused: that must be gartman's ghost writing the newsletter.
 
Quote from Cutten:

Speculation is definitely affecting the price, but only because the fundamentals are also very bullish. If there was adequate supply, then all the speculation in the world would not be able to push the price up 150% in one year.
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when crude busted $60 or $65, we saw an increase in oil pumped from Canada via pipeline. i think that may have been Spring last year (2007). i know, b/c the well-head discounts on lower quality domestic crude increased as the price increased. basically, you had surplus supply coming to market & marginal producers becoming more economical at higher commodity prices. it doesnt go $ for $ b/c marginal producers truck product to refineries and some use sump pumps to pump oil UP outta the well, so energy costs/transport/
production costs rise.

so, we're at $125/bbl - where is all the excess/surplus supply?

i suspect the oil trade is a little crowded as a USD hedge - well maybe "little crowded" is an undertatement.... or maybe the huge surge caught unhedged businesses too exposed and at the end they had to commit? i heard that only one airline other than LUV hedges jet fuel costs - thats crazy.
 
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