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Elgrey's  Instablog

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Expat finance professional living and working in Hong Kong.
  • My 2013 Annual Review

    My apologies for skipping December post - I was too busy with work, studies, and family so I had literally no time to write and honestly speaking I was closing my books to draw year-end dividend so I was not interested in new trades.

    This morning I read article about commodity markets stating major word "Disappontment". I cannot say that about my minifund perfomance. My return on investment is almost 40% in 2013. On a side note I notice that most of the time I was shorting commodities, so 2013 was indeed poor for commodity markets. This year we lost illusion of gold super returns, threat of global famine evaporated with good crop knocking down grain prices, industrial commodities did not make a come back. The only bright spot is natural gas which market finally re-established status quo of supply and demand.

    OK, let us say good bye to 2013 and move into 2014. Happy investing!

    Jan 01 9:24 PM | Link | Comment!
  • My November-13 Strategy Review

    Time to revisit forecast for November:

    Natural Gas - I was right to quit it during first week of the month and I did it just a couple of cents away from the bottom. That's was pure luck and nothing else. Also, I was right saying that important breakthrough was about to develop. Where I was wrong is the I missed the exit moment when I reestablished my shorts during second half of the month - I was anticipating a pullback from month lows to make 4th wave of the Fibo cycle and it happened very accurately, by the book. Then, 5th wave started to develop down and I opened my shorts. However in about day or two this pattern was destroyed completely by sudden news about cold weather and I missed the exit point and now I sit with losing position. I hope the trend will reverse soon as market is heavily overbought. But overall that was quite a grim lesson.

    Cocoa - another grim disappointment. Shorts were premature. The news was old but they were enough to support a raging bull. In any event the market is crowded with speculators holding long positions. Sooner or later they will be liquidating. Stiff upper lip.

    Lean Hogs - speculators gave up their overextended longs and I made some money shorting LH. Not too much but still nice.

    Overall the month was profitable but energy sector jitters made some bloodshed. OK, keep your spirits high, the battle goes on.

    Dec 02 2:59 AM | Link | Comment!
  • My November-13 Strategy

    This one will be brief. In November I am interested in following commodities:

    Natural Gas - I am short NG as of today. My profit target has been reached but I will wait a bit further till bears grow weary. This may happen next week or next month. We are at the verge of important technical development - from this point either a strong 3rd Fibo wave of bearish cycle develops "down" or inverse head and shoulders pattern be developing final leg up. I expect a strong development. Some may say "OK, good advice - either up or down, another typical market analyst". Well, what I do not expect is that price holds still - that's for sure. And I am more bearish than bullish otherwise I would not be holding a short position. What I'm saying is that we are at crossroads and about to witness important developments so stay alert.

    Cocoa - I am bear here. Finally COT shows funds retreat and prices are $100+ off their highs. Fundamentally speaking cocoa processors have replenished stocks for Christmas and next buying wave should not be here until possibly late December - early January when preparation for Valentine day can spark buyers' interest.

    Lean Hogs - I am holding shorts here too. Last live slaughter report tells us that there less animals "processed" by slaughter houses pointing at weaker demand. COT shows bearish developments too. Last Hogs and Pigs report was bearish too but markets seemed to overlook that fact. Possibly, the rally was caused by speculators in absence of news from markets due to US shutdown. However technical picture is not 100% bearish - it looks like 5-wave Fibo cycle is over now but we still need to see more confirmations. If, say, LH loses another 2% during next week then I would be convinced that we are in a strong bearish trend.

    This is my plan for November. I do not understand which way oil is heading so I prefer to play hedged non-directional game rather than go naked for petroleum group. Corn is very lucrative but I want to see USDA WASDE numbers first. Today we only have crop condition and weekly sales reports and they do not give any comfort. For grains I play hedged non-directional game with options too.

    Whatever trash Democrats and Republicans signed in Washington there is some 6 weeks deadline and 2 weeks passed already. No news is normal for politicians. Somewhere along the way during week 5 or 6 they will realize that they ought to do something and then we will witness a brief moment of "hard work", "being almost there" and other clichés. End of the month will be fun. We are yet to see what it will mean to commodities.

    Nov 01 11:58 PM | Link | Comment!
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