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Are Bonds Suggesting More Weakness Tomorrow?


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

Follow me on twitter@commodityinsite

In addition to the two regular broadcasts of my twice a day newsletter, Commodity Insite I sent out the following Special Email Alert. Note the time sent.


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Boxed beef prices rose $.20 this morning with pork cutout picking up $.31. The data was, in theory, bullish livestock but as I type furiously away, cattle are 40 points higher to 30 lower with the oinkers down 1120 points. Thus, the critter complex is moving lower in face of positive news. And markets that go down on positive news are markets that want to go down!


Note, however, the CRB Index is 114 points lower, having dropped below the November low earlier in the day. Since the index is weighted towards grains, livestock and petroleum, logic suggests at some point, those individual markets will all move in the same overall direction.


Also notice the Dow and Russell indexes are in the red with bond prices smartly higher and gaining 14 points. A close here or better with bonds places the market at its 2nd highest close in a month and a half. History shows bond prices to best when there is weakness with most all other markets.


Are bond prices being higher this afternoon suggesting there is more weakness to come on the downside tomorrow across the board? Is that what bonds are suggesting?


Avoid the long side of all markets. In particular, remain short and bear spread the critter complex.


The time is 11:22 a.m. Chicago


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As I type furiously away, cattle are 90 to 100 points lower, feeders down 230 points and hogs down 110 points. Plus, there is widespread weakness with metals while the CRB Index is 110 lower and now below the November low. And bond prices, that tend to rise when there is unusual weakness are up a whopping 16 points.

More weakness tomorrow? Stay tuned!

The time is 1 p.m. Chicago


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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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