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| Each month we will use this area to recap the previous month's market action, share some thoughts about what might lie ahead, and discuss some general market principles. Consider this as an area to gain some insight, hopefully answer a few questions, and possibly even provoke some creative thinking and feedback. |
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May '09 In Review: Volatility continues to rule the commodity world. A new U.S. Administration the redesigning of capitalism, global event concerns, waning consumer confidence and an ever changing economic environment have all added to the hectic pace in the markets. Though the credit crunch is beginning to ease much skepticism remains. Demand from China and India, though slower than most of last year, appears to remain firm. The next Fed meeting is scheduled for June 23 -24 and their decision about interest rates will be closely monitored. As more "green shoots" appear, and stock indices recover, Fed watchers are speculating about a Fed ready to raise interest rates. However, investors globally wonder if the still tender U.S. economy can withstand a rate hike. The decision will have far reaching results both in the U.S. and abroad. Economic conditions and prospects for the months ahead will dictate their move. We have said many time since 2005 that increased volatility would be the norm moving forward. The volatility has certainly presented itself and with demand for all commodities appearing to be strong we look for continued upward movement in the markets. In our opinion, inflation should still be a concern. If recent commodity market strength is an indicator higher prices are ahead. Users of the futures and options markets will have the opportunity to position for the upcoming moves. Those taking the standard "buy and hold" stance in the more traditional stock and bond investments will have tremendous challenges ahead. We believe the next few years could be the most opportunistic for futures investors since the 1970's. Remain vigilant for opportunities. As always, we continue to monitor the markets for those opportunities. We look forward to the months ahead and encourage you to contact us with your thoughts and questions. Thank you for your continued support and confidence. Sincerely, Mitch LaRocca, Jr.
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The risk of loss in
trading commodity futures contracts can be substantial. You should
therefore carefully consider whether such trading is suitable for
you in light of your financial condition. You may sustain a total
loss of the initial margin funds and any additional funds that you
deposit with your broker to establish or maintain a position in the
commodity futures market. Hypothetical or simulated performance
results have certain limitations. Unlike an actual performance
record, simulated results do not represent actual trading. Also,
since trades may or may not have been actually executed, the results
may have under or over-compensated for the impact, if any of certain
market factors, such as lack of liquidity. Simulated trading
programs in general |