wmeubank@ocp.kcmo.com
MYERS ON FUTURES
Prepared by Steven R. Myers
Asian Crash = Crash In the U.S.!
There are some sectors of the U.S. that will crash about as bad as the crash in Asia. Their currency dropping in half will both drop their imports of things like grains and meats and also increase their competitiveness on things they export. They are having a price war of sorts by devaluing their currencies. Whoever ends up with the lowest cost labor via currency drops will get all of the jobs. The real question now is whether China will join in and devalue their currency. They are the ones that have the big impact on both imports and exports. They are a huge buyer of our grains. A drop in their grain purchases would really hit our grain prices hard. This is not yet expected, but it would be a big shoe to drop if it happens. Our grain prices are already in trouble because of lower Asian demand. A larger grain crop ahead due to the lack of El Nino problems is already hitting our grain prices. El Nino may possible be beneficial to grain production so far. You can only go with the trends and it appears to be down in the grains for a while.
There is always a bull market or two that can buck the bearishness that the rest of the list throws it's way!!!
Bonds, sugar, cocoa, silver and the dollar index are the markets that still have long- term major uptrends intact. These are the ones to be long if you like going with trends. Going long just about anything else would be buying into bear markets. That works good if you want to lose money. You should go short down trending markets if you would like to try to make money. About half of the traders prefer having the odds against them if they can brag about buying at the lowest price of the move...even if it was a bargain for only one day. The real goal in this business in not to get a bargain, but to go with the trend instead of against it. This is not like buying a real estate bargain where you will get a profit if you hold it enough years. Having a family history of long life spans does not help in the markets.
Bond Update...
They are a bull market as the definition of an uptrending market is holding true for bonds. Uptrends trend up! Be long uptrends. Bonds are an uptrend! You can make it simple if you want. Making money by being short an uptrend would be much more complicated. This is the 3rd time to the 122 area. Many markets will bust on through an area the 3rd time they hit it. This will mean that lower world wide inflation does mean lower world-wide interest rates.
Sugar And Cocoa
Sugar and cocoa are two more markets that have been getting a bit higher priced over time. That is the definition of both a bull market and an uptrend! Looking back a month, 3 months, a year, or even 3 years shows that both sugar and cocoa have been trending slowly higher. Slow uptrends will usually gain momentum and become fast uptrends. Try to be long uptrends. There are different ways to play the long side of these two markets. Consider them. The bull spread in sugar is one way and also a good indicator!
Many bear markets have shown up lately. I expect the grains and meats to continue lower for some time now that the fundamentals are changing. Bear markets do eventually turn into bull markets, but only after they start moving upward!
December 19, 1997 Steven R. Myers
Myers On Futures Co.
P.O. Box 777, Summerfield, Florida
Hosted by:
One Crossroads Place
610 West Maple Ave, Suite WWW
Independence, MO 64050
(816) 252-4080
sysop@kcmo.com