This rouge trader from the Société Générale named Jérôme Kerviel was the market mover for the week. As the US markets were closed on Monday the futures brokers all over the world were in a major panic. Wednesday morning we all find out that one man once again can collapse a market with one fell swoop of fraudulent trading. The US Federal Reserve states that they did not know anything about the rouge trader before the Tuesday morning interest rate cut. Is it hard to believe that with all the political economics all over the world that the US did not know when the Société Générale knew and was trying to get out the positions with out moving markets. Or was the US just covering for the Société Générale. All right that is enough on the political thinking. Let’s see how the markets reacted to this drop on Monday and Tuesday. Well the DOW did a 600 point turn around, Gold went from $855.00 all the way back over $900.00 & the USD went from the .7700 mark all the way back down to under 7600. It would be pretty amazing if all futures brokers had there clients in on the right side of those moves. This next week will be the one to watch to see if the US Federal Reserve cuts rates another 50 basis points on Wednesday.
The meat spreads from my previous blog. If you were in you should be looking to liquidate positions going into February. Even though we were looking for a slower world economy the food and energy sides should stay strong for another few years. February break for the grains do not look like they will last long enough to really work this year. My end of the month outlook will explain more into the grains and meats than this week.
Sugar, is it still on its way to .1400. If you look at the mid summer to late year movements of sugar there is very little. Speculators are all over the sugar now with volatility going from a .0020 swing to .0070. That is a 300% increase in volatility. Looks like we may be forming a solid trend going into the end of January but only if it can hold a few days of solid gains. How the markets move and change make outlooks on the markets a bunch of nonsense if you don’t change with them. Remember,Past performance is not indicative of future results. Trading futures and options is not suitable for everyone. There is a substantial risk of loss in trading commodity futures, options and off exchange forex.
