CTS Spotlight for the week of March 26, 2010

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03/26/10: The US dollar bull target has been hit amid the continuing debt problems of the now notorious 'PIGS' of the Euro region. It is interesting to see how the metals in general have held up during the US dollar bull run. Could this be an omen of when the market's attention will again be focused on the US? The bond market looks dangerous these days with the 10 year US Treasury approaching an important pivot. A few of the major debt markets have broken under the European strain, can a general move higher in rates be far ahead? While many markets have held onto their 2009-2010 gains, I thought for this week's CTS blog we would take a look at one that hasn't, Sugar. So look there for more on that...


Sugar has been all over the place of late. Prices started to move higher in earnest through 2009. CTS wanted you long from the higher highs made in June and July 2009 but looking at the monthly chart, there where numerous buy points the whole way up. After a consolidation at the top end of a 10 year price channel, I was content to see the long position get stopped out in the fall of 2009. The subsequent move straight up through 'Q1 2010 was surprising to say the least and I felt that I really missed the boat there. The market then reversed and has come crashing down to well below where CTS suggested for longs to be stopped out. What a wild ride! Yet looking at the monthly chart, the recent crash appears to be quite classic in nature. The move to the top of the 10 year channel was the end of the move, not the beginning. Unfortunately, we see these blow off tops (where no-one really has any business being in) tear people apart and lead to financial ruin. Be it Tech stocks, Oil, or in this case, Sugar, understanding the bigger picture, and being very conservative pays off...

As for thoughts on Sugar now; the long term and medium term 50% levels currently sit around $.20 and I would bet that will act as a magnet on the way back up in the not too distant future. There is no reason to be long now, but you can bet CTS will let you know when you should...

That's all for this issue of the CTS Spotlight,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com

CTS Spotlight for the week of March 19, 2010

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03/19/10: As the debt problems of Europe and potential inflation problems of Asia play themselves out, the US dollar index is slowly working its way up to CRI's target. Interestingly, the commodity currencies (Canada and Australia) remain relatively strong with the former pushing to new year highs on the idea that Canada may need to start raising domestic short term interest rates ahead of the US. Of note this week, US equity indexes pushed higher with the Dow now joining the Nasdaq & S&P 500 in the bullish camp. Refer to this week's CTS blog for more on that...

That's all for this issue of the CTS Spotlight,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com

CTS Spotlight for the week of March 05, 2010

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030510: In very choppy action, the US dollar moved little this week. It appears international money is flowing into North America of late as stability and growth are being repriced into the region. Interestingly, commodity prices (and the commodity currencies) have remained relatively firm in the face of this recent rally in the US dollar - which corresponds with our commodity/fear cycle thesis (Please refer to Q1'10 CRI Newsletter for more on that). Further to comments made last week re. Lean Hogs, Pork Bellies have broken out violently higher and look to want to move 30% higher over the coming weeks/months. This week's CTS Blog will look at the Energy Complex and what the charts are suggesting for the coming months.

That's all for this issue of the CTS Spotlight,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com

CTS Spotlight for the week of February 26, 2010

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02/26/10: Most of what was said in last weeks post remains in place. The US dollar is slowly working higher, while most commodities are working lower. Last week I pointed out a top in the Eurodollar market and have begun to accumulate Dec. put options there. And as pointed out, Cotton prices have moved higher aggressively. This week the most notable market appears to be Lean Hogs (refer to this week's commodity blog entry and TTA - Lean Hogs). The breakout suggest a move into the 90's and I will take a really good look at the Aug. 88 calls over the coming week.

That's all for this issue of the CTS Spotlight,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com

CTS Spotlight for the week of February 19, 2010

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02/19/10: A raise in one of the US Fed's key lending rates has given further credibility to the bottom in the US dollar and presented us with a short entry signal in the Eurodollar market (refer to TTA Special report issued 02/19/10 on Eurodollars and the chart above). While I am not looking for a substantial move higher in the greenback, a nice technical rally to both wash out the weak hands and satisfy some basic technical objectives seems likely - and an event like the US starting to bring its short term interest rates back to 'normal-icy' might just be the cause. Most commodity prices have remained stable to slightly weaker in the face of the US dollar rally with the noticeable exception in Cotton and the meat complex. We know meat prices move in opposite to grain prices so that action isn't a surprise. However, Cotton's move to new highs is eye opening in this market and suggests a further move into the .80's is most likely.

That's all for this issue of the CTS Spotlight,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com

CTS Spotlight for the week of February12, 2010

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02/12/10: After a period of little change, the currencies are trending once again. While I am not looking for substantial gains in the greenback, this long overdue bullish correction ought to satisfy the 50% rule and relieve its current oversold condition. At the same time, gold and silver prices have topped, lending further support to the notion of a general US dollar rally. Commodity prices in general should come under pressure in the face of a rising US dollar and that can be clearly seen currently in the grain, softs and energy complex. Because of its inverse relation to grain prices, meat prices have firmed and look to be heading higher after a long period of weakness.

That's all for this issue of the CTS Spotlight,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com

WCTS Spotlight for the week of December 04th, 2009

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12/04/09: After the release of an encouraging North American November employment situation reports, the US dollar rallied smartly and gold fell appreciably. Interestingly, this price action did not break any existing trends (in either the currencies or the metals) and on further inspection one gets the impression that Friday's move was more of a daily oversold bounce rather than the emergence of any new trends going forward. I shall continue to look for the US dollar index to test its 2007 lows in earnest (at or near the 72 level). Elsewhere, most of the existing trends in commodity prices have remained in tact with the notable exception of Live Cattle. While very early, a weekly sell signal has been generated and a break of the 79 level could lead to a big drop in price very much like the action seen in the Pork Bellies market earlier this year.

That's all for this issue of the WCTS Spotlight,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com