RossQ

Potash Corp., Agrium Caught in Industry-Wide Downturn

You are right on about the reason for the decline in the stock of all the O&G, Coals, Steels its almost as if no one believes the outlook the CEO's of these companies talked about in their conference calls, I have listened to those calls and I found little reason for this selloff but one has to accept it and not keep blinders on. I have sold a few positions in commodities to lessen the pain as I dont know what the future hold. Its almost as painful as the internet bubble bursting.

One thing to notice though is that while the dow and s&p were down day after day from march to end of june these stocks were riding high so there was already a disconnect from the market averages, that divergence for me holds no importance.

The fast money was hiding in these stocks waiting for the bottom in Financials and the other undesirables. No they are long stocks that are bleeding money and have bad balance sheets and forsaking the good.

I am with Meridith Whitney and Ken Heebner, there is more pain ahead for the groups I like but when the financial stocks, and housing tech fall from favor hedge funds will find their way back (This rally isnt real, S&P has topped out at 1280 range three times in a month, either it will break upwards or breakdown and my guess is down because of the fundementals).

People think its good for the market if OIL goes down, but thats not true, what that will indicate is that there is less demand for oil and other commodities. This would signal a global slow down which is bad for your multinationals who are doing so great (tounge and cheek due to weak dollar). That brings me to my final point $DXY is at the big resistence level, its no coincidence that commodities i.e. OIL are at major support levels, we will see what gives.


Long SKF, SRS, SDS, QID and and oil, coal, Ag, steels