Jack the Pipper

Do stocks and currencies lead commodities? We think stocks are the best discounting mechanism we have. We think sooner or later the fundamentals of supply and demand are factored into prices.

There’s one important chart I wanted to show you today. I’ll get to that in a minute. News wise, though, there’s nothing too exciting to talk about this morning; prices are little changed from where they finished yesterday … and the day before that.

If we have learned one thing over the many years following markets it is this: If you are paying attention, there are always many more questions than answers. And if you are highly confident about future price action, you have either never traded real money or you haven’t a clue.

Given that Australia has effectively become a satellite country of China–a country we are told is “booming” with growth–does the news item from Bloomberg this morning strike anyone else as a bit odd?

Can we really reconcile the expectations flooding the market this week with key fundamental data we’ve got our hands on? I sure can’t. Can you?

We do our best to build alternative plausible scenarios that are in competition to our current trading positions; we say our best because we know by virtue of taking a position, the bias already exists.

First-quarter earnings season, characterized by low-ball estimates and less-bad-than-expected results, helped drive a sharp rally in stock markets and risk appetite.

If you’ve followed the newsletter crowd much at all, many love to talk about the dollar, but few really risk their well-being trying to make money for real people trading it (it’s a beautiful thing being a guru with impunity).

China is dead in the water without exports. They are in panic mode. That is why they are flooding their economy with massive amounts of capital and suppressing any hint of decent everywhere.

It’s Thursday, the currencies are retracing again so we figured what better time than now to throw together some random thoughts on the markets, news and whatever else. Enjoy!