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April 26, 2006
I have returned to doing commodity
futures brokerage on a full time basis. After
working for years totally on my own, which I always wished to be
otherwise, I have joined forces with Benchmark Financial
Services, Inc. here in Atlanta and will be operating as a branch
office with them. As I have mentioned in previous newsletters, I
have known the three brokers there (Tom Stafford, Rick Sitten
and Willie Adams) for virtually the entirety of my career, going
back to when we all worked together at Merrill Lynch 25 years
ago and really look forward to doing so again. Between the four
of us, we have a cumulative 112 years of experience and I see
the opportunity to interact and exchange information/perspective
with them as a major plus in my own trading.
Several months ago, after having suffered
almost a year with three losing positions (copper, cotton,
bonds), I confess to having exhausted the mental fortitude this
business often requires and seriously considered finding another
profession. I did some looking around and even very briefly went
to work as a mortgage loan officer with one of my longstanding
clients...The bottom line, however, is I missed the markets and
also found it difficult to just toss all my commodity experience
out the window. I had always imagined myself as never retiring,
as wanting to be in this business until either my brain ceased
to function or I kicked the bucket...so that's the way it looks
like it will be...As tough as futures brokerage can be, it also
can be thrilling, is never uninteresting, and, I guess is just
in my blood now....So I am back.
As you are certainly aware, there is a LOT
going on in the commodity markets ...Here are some some charts
of what a number of markets look like with a few comments as to
how they might be viewed. If you have a different
opinion or have your own ideas about how any market is going to
play out, give me a call and I will do whatever I can to help
you with it.
One of my intentions going forward is try to
stick with trades that follow one of my personal reminders on
the wall of my office:
The Best Way Is Going With It.
The idea here is the "easiest" money is made
in being able to identify the direction a market is moving and
then to position with it. This implies that one should generally
stay away from top or bottom picking (although I do believe
there are exceptions at times when it comes to market bottoms).
While no approach to the markets is infallible, one of the best
tools I know is a simple moving average crossover system. On the
charts that follow, many, if not all of them, will show the
12-48 day moving average system I have occasionally used for
almost 25 years now. Moving averages systems can chop you up
(like anything in the futures markets) but if you want some
mechanical approach to "confirm" your opinion, I think there is
nothing better. Not only will such a system help keep you out of
directionless (or wrong way) markets, they can also serve to
keep you on long term moves when you begin to get impatient or
fearful of a market reversal against you.
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Crude Oil is into new all time highs. If you think
the energy problem is not going away, you might want to look at
the Corn, Soybean Oil and Sugar markets. The
Biofuel Industry is growing dynamically and the supply-demand
equations for all three of these commodities is changing
dramatically as more and more plants are being built to produce
alternate sources of internal combustion energy.
All three of the following markets could be directly impacted by
persistently high (or higher) energy prices....
The Metals have all continued to push higher....
And Cotton?
That's enough for one day....Give me a
call if you have any bright ideas...I'd love to hear what you
think...
Please note my telephone numbers have changed:
Toll Free - 866-578-1001 (new)
Direct - 770-425-7241 (new)
Thanks,
Bill Rhyne
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