Market commentary on 10/3/12
Around 4 years ago, market during first week of October'08 was quite shaky and was making huge up and down swings, finally resulting into the famous 2008 crash. However, even today many investors are not fully invested in this rising market as the fundamentals are just not supporting this rise in Indices. This rise is partially driven because of risk moving out of Europe and the money is flowing back into US equities and Bonds. Moreover, QE3 anticipation and finally the announcement to launch QE3 in September has kept this rally going. QE is happening worldwide and so one can quickly conclude that the rise in prices is somewhat inflationary and not organic.
In such inflationary environment, commodities will eventually rise and catch up with the fundamentals. In the near term though, Gold looks overbought and $USD looks oversold - so a reversal is likely. Crude Oil might get sold as well in the near term.
In regards to $NATGAS, the fundamentals are different and unique - many NatGas companies have cut production or are forced out of this game altogether when last year the mild weather and oversupply due to fracking caused prices to tank to below 2USD. As market is always forward looking, the recent rise in NatGas prices is not by coincidence. Fundamentals are strong for NatGas and potential catalysts are on the horizon (e.g., a colder winter than usual) and given many halted production operations, supply may not be quick and enough. With this logic, the time to buy NatGas and coal companies is NOW.
ANR ACI BTU CNX KOL UNG APA DVN XCO CHK SJT
Other trades-
buy AAPL calls for a earnings catalyst on 10/25
buy AEM/GLD/GDX puts
buy ANR leap calls
buy APA calls
Around 4 years ago, market during first week of October'08 was quite shaky and was making huge up and down swings, finally resulting into the famous 2008 crash. However, even today many investors are not fully invested in this rising market as the fundamentals are just not supporting this rise in Indices. This rise is partially driven because of risk moving out of Europe and the money is flowing back into US equities and Bonds. Moreover, QE3 anticipation and finally the announcement to launch QE3 in September has kept this rally going. QE is happening worldwide and so one can quickly conclude that the rise in prices is somewhat inflationary and not organic.
In such inflationary environment, commodities will eventually rise and catch up with the fundamentals. In the near term though, Gold looks overbought and $USD looks oversold - so a reversal is likely. Crude Oil might get sold as well in the near term.
In regards to $NATGAS, the fundamentals are different and unique - many NatGas companies have cut production or are forced out of this game altogether when last year the mild weather and oversupply due to fracking caused prices to tank to below 2USD. As market is always forward looking, the recent rise in NatGas prices is not by coincidence. Fundamentals are strong for NatGas and potential catalysts are on the horizon (e.g., a colder winter than usual) and given many halted production operations, supply may not be quick and enough. With this logic, the time to buy NatGas and coal companies is NOW.
ANR ACI BTU CNX KOL UNG APA DVN XCO CHK SJT
Other trades-
buy AAPL calls for a earnings catalyst on 10/25
buy AEM/GLD/GDX puts
buy ANR leap calls
buy APA calls
