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Redux: Disappointing To Bearish


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The data and opinions in this report are for general information use only and are not

intended as an offer or solicitation with respect to the purchase or sale of any futures

contracts. Although all information and opinions are believed to be reliable, we cannot

guarantee its accuracy or completeness. The open trade and previous recommendations

were suggested, but that does not necessarily mean any individual followed the trades

exactly as recommended. This newsletter has been prepared without regard to the specific

investment objectives, financial situation and needs of any particular recipient. Past performance

is not necessarily indicative of future results. There is a significant risk of loss associated with

trading futures and options. It should be noted that the impact on market prices due to seasonal

or market cycles and current news events may be reflected in current prices.

Jerry Welch, Commodity Insite!
Call me at 406 -682 -5010
Ennis, Montana 59729

Follow me on twitter@commodityinsite

Below is my weekly newspaper column from October 13, 2017. Hope there is something in my ramblings you find of interest.

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Disappointing To Bearish.

Business Insider.com posted an article dated September 20, by Jared Dillian of Mauldin Economics, entitled, The everything bubble is ready to pop. The first paragraph read as follows. It wasn't always this way. We never used to get a giant, speculative bubble every 78 years. We really didnt. But in 2000, we had the dot-com bubble. In 2007, we had the housing bubble. In 2017, we have the everything bubble.

Mr. Dillian went on to write, I did not coin the term "the everything bubble." I do not know who did. Apologies (and much respect) to the person I stole it from. Why do we call it the everything bubble? Well, there is a bubble in a bunch of asset classes simultaneously.



Mr. Dillian is a veteran of Wall Street and former head of Exchange Traded Funds (ETF) with the former Lehman Brothers. He has lived and traded through two bear markets. The asset classes he refers to as bubbles are crypto currencies such as bitcoin, the stock market, subprime auto sales, corporate debt and stock indexing. And according to Business Insider, Mr. Dillian is staking his reputation on a call that a downturn is coming. And soon.

A great magazine, The Economist published a piece on October 7, with a title, The bull market in everything. Asset prices are high across the board. Is it time to worry? The paragraph below stands out.


"Asset-price booms are a source of cheer, but also anxiety. There are two immediate reasons to worry. First, markets have been steadily rising against a backdrop of extraordinarily loose monetary policy. Central banks have kept short-term interest rates close to zero since the financial crisis of 2007-08 and have helped depress long-term rates by purchasing $11trn-worth of government bonds through quantitative easing. Only now are they starting to unwind these policies. The Federal Reserve has raised rates twice this year and will soon start to sell its bond holdings. Other central banks will eventually follow. If todays asset prices have been propped up by central-bank largesse, its end could prompt a big correction."

Over the past few months, I also touched on the fact that there are bull markets all over the place but not with the US ag-markets in particular and commodities in general. I also highlighted the fact that volatility is increasing greatly for the Big Four: stocks, bonds, currencies and commodities. As a result, I believe the final quarter of this year may turn out to be quite disappointing or bearish all markets with only a few exceptions.

The most difficult question to answer when investing or trading is this: When to get out? And It does not matter with a profit or, a loss. Unfortunately, there is no answer to that question. It comes down to how deep are your pockets? What is your tolerance for pain? What are your other financial obligations?


It is often said that the most dangerous words when investing or trading are these. This time its different. History shows that when it comes to a market, nothing keeps going up forever. Nor, goes down forever. History also shows there comes a time when values are so stretched, emotions so manic or depressive and market participants so complacent a change in trend is on the cusp of unfolding. And that is just about the time you begin to hear the most dangerous words in the world of investing and trading being uttered daily. This time it is different.


For eight and a half years of a bull market with stocks and a host of other markets as outlined above, it is now a question can that scenario continue? No one knows for sure and therefore, my advice is to do as the big professional money managers do. If the 50 day moving average on a market position is violated to the downside, lighten up and sell. Take profits. Do not believe for one minute that, this time its different because it is not.


In late September in my twitter account, twitter@commodityinsite as well as my twice a day newsletter Commodity Insite I mentioned that a significant change in trend for stocks, the Dow and so on would begin on October 10, that arrived a few days ago. Only with hindsight will it be known for certain that such a bold forecast is accurate. And it is because of that forecast, I have no desire to be long much of anything in the final three months of this year. The final quarter of 2017 has the potential to be disappointing to bearish.

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The stage is set for this week to be bearish grains and livestock. I base that assumption on the poor close with grains on Friday, coupled with the bearish surprise founds in the Cattle on Feed report after the close. But then again, this is Sunday, October 22 at 7 a.m. Chicago time and I could be wrong.




The data and opinions in this report are for general information use only and are not

intended as an offer or solicitation with respect to the purchase or sale of any futures

contracts. Although all information and opinions are believed to be reliable, we cannot

guarantee its accuracy or completeness. The open trade and previous recommendations

were suggested, but that does not necessarily mean any individual followed the trades

exactly as recommended. This newsletter has been prepared without regard to the specific

investment objectives, financial situation and needs of any particular recipient. Past performance

is not necessarily indicative of future results. There is a significant risk of loss associated with

trading futures and options. It should be noted that the impact on market prices due to seasonal

or market cycles and current news events may be reflected in current prices.





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About the author


Jerry Welch has been in the futures industry since the late 1970's and is a true veteran of the markets. He has been quoted often in Wall Street Journal and is author of Commodity Insite, one of the longest commodity futures newspaper columns in history. His weekly column has been published each week since the mid 1980's and is one of the most recognized names in the world of commodities.

Mr. Welch is also known widely as a, "so so" flyfisherman.  

His column is published by the Illinois Agri News in La Salle, Illinois, Cattle Today, in Fayette, Alabama as well as Consensus, in Kansas City, Kansas.

He can be contacted at 406.682.5010 for a view of his, "twice a day" market column that includes price forecasts and trading suggestions.

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