No one likes commodities anymore

A prime example of why I don’t favour long-commodities in the portfolio: I don’t understand how/why they can fall, seemingly forever, on well-known economic themes.

Grains had it bad for most the year, but oil caught up.  Here are 2 long-only ETF/ETNs showing the issue: USO follows the oil price, and CORN follows the corn price.

Screen Shot 2014-11-04 at 13.30.48

One characteristic that has been nice is sustained trends.  That means medium-term momentum funds have made a killing on these products this year.  A small pat on the back for inclusion of the managed futures mutual fund.

In other news, the equity markets seem to be rattled again – just a couple days after the JCB adding a ton of stimulus, and GPIF buying a new $180bn in equities.  Maybe back to proper two-sided markets??


World financial markets to Japan Central Bank: 有難うございます。

Just as the QE tap gets closed by the Fed earlier this week, the Bank of Japan steps up to the plate with another JPY 10trn (around USD 130bn) of stimulus.  Queue financial markets back to all-time highs:

Doumo arigatou, Kuroda-san.  Source: thinkorswim by TDAmeritrade

Doumo arigatou, Kuroda-san.  Cancel crash.  Source: thinkorswim by TDAmeritrade

My favourite quote on this, from Bloomberg:

“Markets don’t really seem to care about what kind of stimulus we get or where it’s coming from, as long we get something,” said Teis Knuthsen, chief investment officer at Saxo Bank A/S’s private-banking unit.

Once again, the dip-buyers win: even if you pulled out at the death cross, you were out of the market for all of about 1 week before you got back in (missing out on about 0.5% of appreciation along the way).  Guess we just keep going until it stops working!