It doesn’t seem to matter that Alan Greenspan is no longer at the Fed. Like muscle memory, the markets have moved lower as Mr. Greenspan defends his history in front of Congress.
With the climate ripe for a scapegoat for the real estate and overall market melt-down, Mr. Greenspan is, in effect, defending his legacy.
Famous for his obtuse and confusing fed rulings during his tenure, for sure he will be doing his best to clarify instead of mystify.
As for the Dow, I have not changed my feeling. We traded above it 2 times in the past 2 days. By “it” I mean the 11,000 level in the Dow Cash.
If you read my blog, it was my opinion that the first 2 times we traded there it would be a fade. If we can settle above that level, then that would affect the market to the bullish side. Watching the cable talking heads masticate the 11,000 level gives me hope. Apparently they have suddenly decided that 11,000 is a mystical resistance level.
Bottom line I am still friendly, mostly because the level of negativity remains so high.
As for the grains, apparently, the Chinese have requested import licenses for 2 million metric tonnes of corn. Wilmar is the company that handles the imports.
Funds are record short 55K contracts of wheat. right now we are 20 cents off its lows. That’s 1k bucks a contract. Bon Appetite. Kind of an expensive lunch for the masters of the universe who have had this trade on.
Along the same line, its interesting that the Funds were also long over 50k contracts of corn for most of the first quarter. They paired themselves down, and recently got short. Granted a paltry 2k contracts, but the fact that they were net short after being so long for so long, its not that surprising that now they are short in the hole on their new speculation. May corn is up 12 cents from its lows today, a tidy 600 bucks a contract slap.
Friday’s supply and demand could still put a damper on longer term prospects. If we come out with another 2billion Carry out for corn, I don’t care how much corn China wants to buy, we will break, and they can buy it cheaper.
Good trading
