Sample Issue Index
Prepared by
Myers On Futures Co.
Silver Bottom Sign!
It is a bullish market sign when a market rallies on bearish news. Most of the metals rallied right back today after the initial bearish reaction to the increase in the interest rate. It would have been even more bullish had the market rallied yesterday. Both reactions are bullish signs. One would have been even more bullish. You can expect a quick move when a market ignores big news. It took a day for the silver market to shake off the bad interest rate news. This is because this is a very new bull market and it has yet to gain any upside momentum. Silver can occasionally move much better than gold once an uptrend starts. Silver has been holding better than gold for some time. Silver Is often more volatile than gold. It can occasionally be a favorite of the funds. There is a lot of money to come out of stocks to diversify into the precious metals once there is a reason to do so. The first and best reason to do so would be an uptrend developing in the precious metals markets.
Platinum and palladium are a couple precious metals that can also move
on industrial demand. Some markets are known to be thinner than others.
Inelastic markets can move much more than others when they get a fundamental
reason to do so. These two markets may shoot up even faster than silver,
but some funds would not mess with these markets. It depends on one's agility.
You want a stop at some point in all markets.
Copper Becoming Precious
Copper is the only metal that has had good enough fundamentals the last few months to keep a steady uptrend going. Copper is more of a world-wide economic barometer than an inflation barometer. The economy is growing enough in many Third World countries that they now have a use for copper. This metal could go much higher. Bull spreads are one way to play this market. They are a way to gauge the strength of this market no matter how you trade it.
New Economic Trends Put
Bonds Down And S&P Up
The trend has been down in bonds the last year and up in the S&P.
The bonds were an advance indicator of coming economic strength. A good
economy with no inflation yet is bullish for the S&P. The bonds may
take a rest here after their large recent break, but their longer-term
trend should still be much lower as a little inflation does kick in. A
strong economy and/or Inflation can put bonds way under the 100 mark.
I disagree with some analysts as to whether the chicken or the egg came first. I believe the bond market shows the demand for that commodity just like all the other commodities. The difference is that this market goes down when the underlying commodity called money gets a lot of demand. It is just common sense that people will pay a higher interest rate price for this commodity when the demand outruns the supply. They would be paying that higher price because they can afford to do so in a stronger economy and still make a profit. So you see, I believe a dropping bond market is the result of a strong economy. I also believe the Fed is only a follower to adjust rates when the market has already moved. Artificially fixing the price either high or low has been shown to cause an eventual extreme movement in the opposite direction in all commodities. The bond market is usually responding to the market forces of the economy and not merely listening to the Fed. So you further see that higher rates here will not stop the economy. These higher rates are a reflection and natural indicator of a strengthening economy. This is why the S&P is still very close to its all-time high price. This is why the odds are still for the S&P to move higher. Do keep in mind that the S&P is at a critical point with failure here to cause quick selling by the agile traders. Even a large and quick break here would not mean the larger upmove is over. A break could still be many thousands in the S&P futures. It is especially important to use stops in the S&P right now.
Cocoa And Sugar To Trend
Both of these markets have built massive bases on the long-term charts
at low levels that could support a huge move to the upside once we get
an upside breakout. I want to keep a vigilant eye for signs of strength
in these two markets. They both appear to be starting up.
March 27, 1997
Steven R. Myers
Myers On Futures, Co.
P.O. Box 777, Summerfield, Florida
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