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Hi Steve
Oh P...lease ... salt water in your ears.
Next you're going to tell me that you couldn't find a beach bunny to change
your laptop battery.
How did you like the fund stampede yesterday? Gee ... they can move a lot of
contracts <G> I hear that there were over 1,000 unfilled CN long orders. I
guess the sellers at the higher prices didn't step up <G>
I like your BB histo ... what an indicator!
Enjoy the fun ... when you're rested I'd like to know what "stopper"
"stopped" etc. means when commercials are taking deliveries at the end of
the contract.
Also ... what does this mean "... Deliveries are large and only partially
wanted by Commercials due to spreads being at full carry..." If the K
contract is over why are they still worried about spreads?
Best regards
Walter
----- Original Message -----
From: "Steve Karnish" <kernish@xxxxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Monday, May 01, 2000 3:52 PM
Subject: Re: KW0K/KW0N
| Walter,
|
| Whatever I'm using, to time me into the wheat/corn spread, is not working
| (therefore probably not worth dissemenating). At least the "outright"
| positioning is still holding up. I went long wheat on Friday morning
while
| kicking up sand, on the beach, in north county San Diego. Nicely formed
| five footers, at intervals of about seven seconds, with a slight off-shore
| wind, made for a beautiful morning to surf and a decent morning to go long
| wheat.
|
| For those that are curious about the spread and the indicator I have
| attached a chart. Two standard deviations from the mean usually is a
| "safer" bet than to "diddle in the middle". Now, besides smacking my
| forehead, I have saltwater in my ears.
|
| Has anyone seen my boogie board?
|
| Steve Karnish
| Cedar Creek Trading
| http://www.cedarcreektrading.com
| ----- Original Message -----
| From: Walter Lake <wlake@xxxxxxxxx>
| To: <metastock@xxxxxxxxxxxxx>
| Sent: Monday, May 01, 2000 11:13 AM
| Subject: Re: KW0K/KW0N
|
|
| > Hi Steve
| >
| > Sorry I didn't get back to you.
| >
| > I found an old email were you mentioned that you were using the BB
| histogram
| > on spreads. Are you still using that?
| >
| > I've been using MRCI's normalizing procedures on individual yearly
spreads
| > (30 years) along with the actual spread data to do more historical
| analysis.
| >
| > "... Thanks for making me "think", or whatever it's called when my head
| > hurts ..." Sorry Steve, this is usually caused by excessive smacking of
| the
| > forehead. <G> duh
| >
| > Best regards
| >
| > Walter
| >
| > PS: to others who wrote, you can used the "butt" end of the 3-D ribbon
| chart
| > in XL or a 1 stdev Whisker plot for cheap/dear analysis
| >
| > ----- Original Message -----
| > From: "Steve Karnish" <kernish@xxxxxxxxxxxx>
| > To: <metastock@xxxxxxxxxxxxx>
| > Sent: Wednesday, April 26, 2000 11:36 PM
| > Subject: Re: KW0K/KW0N
| >
| >
| > | Walter,
| > |
| > | I don't know where the cut-off for big Pee and little Pee begins and
| ends.
| > | I trade for producers who do four to eight thousand acres of wheat.
| Jane
| > | Smiley wrote in "A Thousand Acres" that the measure of wealth and
| standing
| > | in Iowa was her title (1,000 acres under production). Of course, that
| was
| > | fiction. Some of my boyz yield 75 to 100 bushels an acre in our
fertile
| > | "loess" soil. To here them talk, they all "poor mouth" anyone who
will
| > | listen and complain about being poor dirt farmers. To me, these are
| large
| > | wheat producers. Some have lost 300k a year during this deflationary
| > | spiral.
| > |
| > | I don't know who the author of the article was, but "trust me" (and
hey,
| > | never trust a broker that says: "trust me"), producers go net long all
| the
| > | time. I've seen feedlots in the OK and TX panhandles go out of
business
| > | because of their speculative long positions. I also witnessed two
| silver
| > | refineries close their doors because of their speculative long
positions
| > in
| > | the precious metals. I've never traded for a grain farmer, large or
| > small,
| > | that has ever priced their crop on the board of trade.
| > |
| > | One of the questions, when opening an account is: "is you is or is
you
| > | ain't" a hedger/producer. All the ag-accounts check the little box
that
| > | allows them to trade at the reduced/favorable margins. A typical
5,000
| > | bushel wheat contract requires $675 in margin for a speculator. The
| same
| > | contract can be held by a producer for a mere $400. Brokerage houses,
| > | exchanges, and brokers don't give a rip that most producers don't
| > "properly"
| > | hedge their crop. The farmers get the advantage of the hedging
margins
| > | (theoretically, because they are not at risk...after all, they are all
| > using
| > | these markets correctly...right?) and then blatantly speculate in the
| > | direction they "wish" the markets will go (up).
| > |
| > | If the "commercials" were all using these markets in the classic
hedging
| > | scenario, why did Orange County and the one of the largest Japanese
| banks
| > | take it in the shorts? (maybe they took it in the longs?) Since it's
| not
| > | against the law for a reporting commercial to speculate, the numbers
can
| > be
| > | misleading.
| > |
| > | Let me stoop to one lower rung on the ladder. After interviewing
| hundreds
| > | of farmers, I've come to the conclusion that "most" farmers LIE to
their
| > | county extension agents about what they have under production. Most
| > county
| > | extension agents claim that they know most producers lie, so they
| "fudge"
| > | the numbers to compensate for the little fibs when the producers feed
| them
| > | the "funny numbers". Now, that's about as far as I have followed the
| > | dishonesty of "reporting", but as you can imagine: the govt. reports
| that
| > | come out are not necessarily accurate.
| > |
| > | Don't believe everything you read in Futures Magazine...even I was
| quoted
| > in
| > | the April '00 edition and as Groucho used to say: "I'd never belong to
a
| > | club that would have me as a member." Producers go long everyday.
The
| > text
| > | book examples of what should be done does not necessarily play out in
| > | reality. This "tired" discussion has been rehashed a dozen times on
the
| > | "Realtraders forum" over the last three years. Survey brokerage
| > principals
| > | or reps and the broad smile of recognition appears when this topic is
| > | discussed.
| > |
| > | This in no way diminishes the value of the COT report (I guess), but
is
| > this
| > | information a real tool in creating wealth? Steve Briese would argue:
| > YES.
| > | Briese's broad "brush strokes" vaguely frame the market (my very
| > subjective
| > | opinion) and are not very much use for someone trying to catch a
couple
| of
| > | pennies on one side, only to flip and reverse their position.
| > |
| > | Walter, you're contributions to the forum are terrific. Please
continue
| > to
| > | provide us with your valuable insight. I just had to speak my piece
on
| > the
| > | Big P, doing the right thing, thing. By the way, who is accountable
for
| > | assigning individuals to the categories that comprise the COT and how
| > | accurate is the reporting? Always remember: the only thing that is
| 100%
| > | the truth, on a continuing basis, is the price.
| > |
| > | Thanks for making me "think", or whatever it's called when my head
| hurts,
| > |
| > | Steve Karnish
| > | Cedar Creek Trading
| > | http://www.cedarcreektrading.com
| > |
| > |
| > |
| > |
| > | ----- Original Message -----
| > | From: Walter Lake <wlake@xxxxxxxxx>
| > | To: <metastock@xxxxxxxxxxxxx>
| > | Sent: Wednesday, April 26, 2000 5:49 PM
| > | Subject: Re: KW0K/KW0N
| > |
| > |
| > | > Hi Steve
| > | >
| > | > We are talking about reporting Commercials aren't we? ... and
| Producers
| > | with
| > | > a Capital "P" <G>
| > | >
| > | > But since I'm such a wicked mouth piece for exchange literature <G>
| ...
| > | > maybe you could help me out with "...have taken advantage of
hedging
| > | > margins, but have always been "long in the field and long on the
| board".
| > | > ..."
| > | >
| > | > Best regards
| > | >
| > | > Walter
| > | >
| > | > PS: For others that wrote ... I received this back from the author
of
| > the
| > | > Futures Mag article on COT analysis.
| > | >
| > | > "... when Producers cover short positions they just REDUCE their
total
| > | > shorts--I don't believe they ever go net long (likewise for Users
| > selling
| > | > their long positions).
| > | > I get my COT data from the CFTC website, but I don't use
spreadsheets;
| I
| > | > save the data as a text file & import it into my own programs. ..."
| > | >
| > | >
| > | > ----- Original Message -----
| > | > From: "Steve Karnish" <kernish@xxxxxxxxxxxx>
| > | > To: <metastock@xxxxxxxxxxxxx>
| > | > Sent: Wednesday, April 26, 2000 5:46 PM
| > | > Subject: Re: KW0K/KW0N
| > | >
| > | >
| > | > | "Producers are usually short in the market. Because Producers are
| > going
| > | to
| > | > | deliver product against their short
| > | > | positions, they rarely go long."
| > | > |
| > | > | Walter,
| > | > |
| > | > | Nothing could be farther from the truth than the above statement.
| My,
| > | my,
| > | > | my Walter...please don't influence "young and tender" newbies with
| > such
| > | > | wickedly false sentences, gleaned from exchange literature. I've
| > traded
| > | > for
| > | > | hundreds of producers (grain, cattle, pig, metal and "you-name-it"
| > | > | producers) and 99% of them have taken advantage of hedging
margins,
| > but
| > | > have
| > | > | always been "long in the field and long on the board". It's just
| the
| > | way
| > | > it
| > | > | is. I'm not saying it's the right thing to do. All I'm saying
is:
| > | that's
| > | > | the way it is.
| > | > |
| > | > | The truth is out there,
| > | > |
| > | > | Steve Karnish
| > | > | Cedar Creek Trading
| > | > | http://www.cedarcreektrading.com
| > | > |
| > | > |
| > | > | ----- Original Message -----
| > | > | From: Walter Lake <wlake@xxxxxxxxx>
| > | > | To: <metastock@xxxxxxxxxxxxx>
| > | > | Sent: Wednesday, April 26, 2000 12:47 PM
| > | > | Subject: Re: KW0K/KW0N
| > | > |
| > | > |
| > | > | > To Steve and Scheier and others who wrote
| > | > | >
| > | > | > "... My experience with the commercials is that they accumulate
a
| > long
| > | > | > position often well before the bottom has arrived, and even more
| of
| > | > | > interest, will begin dumping this position long before the top.
| ..."
| > | > | >
| > | > | > Commercials are not a monolithic block but are composed of two
| > | separate
| > | > | > "hedger" groups in the grains complex: Users or "millers and
| bakers
| > | and
| > | > | > cereal makers, etc." and Producers i.e., farmers, elevators,
etc..
| > | > | >
| > | > | > Both are hedging from different points of view.
| > | > | >
| > | > | > Users are usually long and Producers are usually short in the
| > market.
| > | > | > Because Producers are going to deliver product against their
short
| > | > | > positions, they rarely go long. The reverse is true for Users.
| > | > | >
| > | > | > This simplified explanation is how I understand the COT
positions.
| > | Maybe
| > | > | you
| > | > | > could explain some more about how to think about how to trade
| > against
| > | > | > (contrarian maybe) hedging strategies Steve.
| > | > | >
| > | > | > Commercials are positioned for a longer time frame.
| > | > | >
| > | > | > The Funds are where the "danger" or "opportunity" lies. This is
| why
| > | the
| > | > | > Research Departments track their positions so carefully.
| > | > | >
| > | > | > Best regards
| > | > | >
| > | > | > Walter
| > | > | >
| > | > | > PS: For others who wrote here's an end-on look at the last 30
| years
| > of
| > | > SK
| > | > | > front months. It'll give you an idea of how flat they are and
| cheap
| > Vs
| > | > | dear.
| > | > | > You can do the same with the spreads. Seasonalities are
different.
| > If
| > | > you
| > | > | > don't like using Demetra then you can use "P" values for the
| > dailies.
| > | > | >
| > | > | > ----- Original Message -----
| > | > | > From: "scheier" <scheier@xxxxxxxxx>
| > | > | > To: <metastock@xxxxxxxxxxxxx>
| > | > | > Sent: Wednesday, April 26, 2000 9:55 AM
| > | > | > Subject: Re: KW0K/KW0N
| > | > | >
| > | > | >
| > | > | > | The question I guess is whether you should ever buck the
| > | > | > | commercials in the commitment of traders report as they
| > | > | > | accumulate a position, in this case, the grains. I think you
| > have
| > | > | > | to consider whether your system is designed to trade short
term
| > | > | > | signals or you're a longer term trend follower. I don't see
it
| > | very
| > | > | > | relevant for Adam's P&L techniques, and even's Steve K's
| > | > | > | oscillator signals could continue to give accurate calls for
| short
| > | > | > | term cycles while the commercials continue to accumulate.
| > | > | > | My experience with the commercials is that they accumulate a
| > | > | > | long position often well before the bottom has arrived, and
even
| > | > | >
| > | > | >
| > | > |
| > | >
| > | >
| > |
| >
| >
|
|