CTS Spotlight for the week of April 16, 2010

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04/16/10: The currencies remain little changed this week in the face of a daily top in the US dollar. The posted upside target for the greenback was hit and it remains to be seen whether this short term top will turn into a weekly top. While this going on, gold has moved up to break its weekly top suggesting prices have found a good deal of buying interest just above $1000. Elsewhere, the soy complex is starting to show signs of strength as we head out of the seasonally 'demand' driven market and head into the 'supply' driven market. Please refer to CTS blog for more on that...

Soybeans: Basically reiterating what I wrote on the chart. Massive weekly wedge appears to have broken to the upside. We are finishing up the 2009-2010 crop with a base in and around 900. Should there be any fears of flood or drought price could move higher in earnest. Regardless, the current weekly 50% and the highs from late 2009 sit in and around the 1085 area, so that shall be my initial upside target as we head into the spring planting season.

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 April 02, 2010

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04/02/10: There is little change to the broader commodity markets as we head into the Easter holiday weekend. Equities continue to rise, bond markets look weak and the US dollar continues its dead-cat-bounce. Industrial metals are outperforming precious, crude continues to dominate over Nat. gas and the meats continue to outperform the grains (where Corn has now joined the bearish camp). Most notable this week, the Japanese Yen has broken down in earnest (refer to this weeks CTS for more on that)...

Japanese Yen: This currency (along with many others) has been on a wild ride against the US dollar over the past few years. First it lost almost 20% of its value then turned around and appreciated more than 40%. One may even argue it has acted as more of a 'safe haven' than the greenback. Notice how the Yen bottomed at almost the exact time the S&P 500 topped out. Has this violent move higher played itself out?

From a monthly perspective (chart on right) we see that the current 50% level and the highs from late 2004 sit around the .985 area. I would be willing to bet there will be a fair amount of support at or near that level (or another .07 lower to go).

From a weekly perspective (chart on left) we see that over the past two weeks the market has confirmed a massive double top price patten. Prices have not only established a new weekly downtrend but have also broken through the uptrend governing this entire bull run.

Something significant is happening here people! Keep in mind, the gold market has been trending lower for 10 weeks, the US Dollar index has been trending higher for 11 weeks and the Eurodollar (that is the corporate US short term interest rate market) has been trending lower for 7 weeks. The market knows something...will any in the broader media catch it? only time will tell, but my hunch is no...

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 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