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George
Slezak's www. Stock Index Timing .com Index
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MARKET VIEWS .TV INTERVIEW CHART PAGE |
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From Commitments of Traders .com ( www.cot1.com
) The following charts are for an quick UPDATE interview of George Slezak by Ike Iossif on April 26. The previous interview of George Slezak by Ike Iossif of Market Views .TV on April 12, 2008 is below.
5 minutes LISTEN The following chart is from my SPECIAL DAILY update of the commodity market condition at Commodity Index Timing .com, where I am tracking the day by day unfolding of the commodity market top pattern compared to the stock market top pattern of 1929 and 1987. The second chart below is also from my SPECIAL DAILY update focusing on GOLD AND SILVER. UPDATE CHART 1
UPDATE CHART 2
The above chart comparison of Gold and Silver to the stock market crash pattern of 1929 and 1987 suggest we should all be on special alert for a chaotic decline in commodities in the coming week or two! Good luck and good trading! George
---------------------------------------------- The following charts are for reference to the interview of George Slezak by Ike Iossif of Market Views .TV on April 12, 2008. ----------------- From Commitments of Traders .com ( www.cot1.com
)
"Could we have a 1929 stock market type decline in the commodity indexes?" In my web site, www. Commitments of Traders .com, (shortcut www.cot1.com ) I prepare a table of the net commercial positions in the major commodities and highlight the net positions when they are at or near the largest net short position in the last one, three, or five years. Of the 43 markets covered in the weekly summary, 10 are for interest rates and stock indexes. Of the remaining 33 markets covered, since the beginning of the year, 19 have had a highlight for the having near the largest net commercial short in the last one, three or five year period. Here is a recent 12 week summary of net commercial positions from the Commitments of Traders .com web site. DISPLAY 1.
Considering that the Commodity Index Trader longs (hedging related to commodity indexes) are reflected in these net commercial positions, the heavy net commercial short positions are truly quite substantial! The CFTC releases their "Supplemental COT Report" which breaks out the Commodity Index Trader (CIT) positions from the net commercial positions in just 12 of the agricultural markets. I have accumulated the totals of the net positions in the CIT Report for the 12 agricultural commodities and plotted the positions over the following weekly chart of the CRB. I have been concerned about the effect of the substantial investment in the commodity index funds having the effect of of putting excessive investment demand on commodities generally produced for consumption. I have warned that if the excessive demand ever wanes or reverses, the consumption demand will not be able to absorb the investment liquidation supply. My recommendation has been to view the total CIT line (in blue below) as representative of commodity index accumulation or liquidation. I believe the falling blue line in the following chart could suggest the beginnings of liquidation in the commodity index investment funds. DISPLAY 2.
Generally, in individual commodity markets, when I have a near one, three, or five year record net commercial short position in a commodity, I then go to the chart of the commodity and look for "technical" signs of a change in trend to the direction of the net commercial position. If one sets up, I might recommend a short position with a stop above the recent trend high. The long term chart of the CCI, the Continuous Commodity Index (the old equal weighted CRB Index) in the following chart (in red) shows a bubble pattern very much like the stock market chart of the 1920s. DISPLAY 3.
In my related web site "Commodity Index Timing .com," (shortcut www.cit1.com ) I have moved to a sell signal on the commodity indexes on the simple signal of when the indexes traded below the two week low, with a stop recommended above the recent highs. Now that a few more weeks of data have filled in since the commodity index market top, a familiar market top pattern is developing. The following chart compares the pattern of the daily chart of the current Continuous Commodity Index (in red ) to the pattern of the daily chart of the Dow Jones Industrial Average in 1929 and in 1987. DISPLAY 4.
Pattern comparisons of substantially different markets, like the above stock indexes compared to the commodity indexes above are interesting, but , as shown in the two small charts above at the right, have very little historical precedent. True, the current pattern matches quite closely over the past 30 calendar days, but at any point forward, the patterns could vary substantially. Accordingly, at this point, I set the probability of the pattern continuing to match over the next 30 days at about 1 out of 30. But, maybe, if the comparison continues to match up for another week or two, the possibility of a substantial decline in the commodity indexes near the end of April could increase. Beginning this week, I will update the above comparison of the current CCI to the patterns of the stock market in 1929 and 1987 on a daily basis in my web site commentary at www. Commodity Index Timing .com that is available to subscribers.
Good luck and good trading! George George Slezak publishes the web sites www.commitmentsoftraders.com and www.stockindextiming.com and www.commodityindextiming.com for a combined monthly subscription of $35 per month.
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For more information call George at 1-888-311-3400, or email george@ georgeslezak.com All aspects of any trade recommendations contained in this report are subject to modification at any time. FUTURES TRADING INVOLVES SIGNIFICANT RISK OF LOSS AND IS NOT SUITABLE FOR EVERYONE AND THE RISK OF LOSS SHOULD BE CONSIDERED CAREFULLY BEFORE MAKING ANY TRADES. A STOP LOSS MAY NOT LIMIT YOUR LOSS TO THE AMOUNT INTENDED. YOU SHOULD BE FOREWARNED THAT SYSTEMS WHICH TRIGGER FREQUENT TRADING SIGNALS AS PART OF A DAY TRADING STRATEGY CAN RESULT IN SUBSTANTIAL COMMISSIONS AND FEES. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. ANY STATEMENT OF FACTS HEREIN CONTAINED ARE DERIVED FROM SOURCES BELIEVED TO BE RELIABLE, BUT ARE NOT GUARANTEED AS TO ACCURACY, NOR DO THEY PURPORT TO BE COMPLETE. ANY REFERENCE TO PERFORMANCE IS INTENDED TO BE UNDERSTOOD AS STRICTLY THEORETICAL. REGULATORY DISCLOSURES REGARDING HYPOTHETICAL RESULTS HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS EXISTS IN FUTURES TRADING. All traders should read the CFTC CONSUMER ALERTS and the "COMMISSION ADVISORY" on trading systems.
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