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Regarding seasonal commodity trading, in terms of getting ideas, you
mentioned Bernstein, there are many others. A brief rundown with my opinions
where applicable:
- Jake Bernstein, Winnetka, Illinois (Chicago), need to separate his various
businesses to find where you think you can receive value. He has historical
data ("Cycles Through 2010") going back to the dawn of civilization as we
know it, revealing cycles in every commodity you can think of. He has
fabulous seasonal-comparison books ("Seasonal Charts", and "Daily Seasonal
Futures Charts") that I find useful. He publishes a monthly "Letter of
Long-Term Trends" that may be worth getting a sample of. I use his two
seasonal chart books to check myself. He shows you when certain seasonal
trends are strongest, when they reverse, and he gives you all the comparison
data and numbers so you can see for yourself. A great source of valuable
data. These books are indeed expensive, but he has done all the research and
compilaton work for you. Great little charts.
- Hightower, Chicago, publishes a monthly newsletter that recommends trades
based on seasonal trends. Extremely traditional, e.g., "Sugar goes down 13
out of 15 times in the next 3-week period, so short Sugar at such-and-such a
price with an expectation of such-and-such a profit."
- Every full-service commodity broker has access to seasonal trends, and some
of them develop trading recommendations based in part on those trends.
Naturally, if you are a client, the firm will share those observations with
you. The one I use for this, which I've mentioned to the RT group before, is
Utterback Marketing Services in New Richmond, Indiana. This outfit is all
farmers and all business. They have an up-to-date systems approach to
seasonal trading. I'm sure there are dozens of similar good firms.
- A number of "vendors" out there sell seasonal trade suggestions. One of
the more respected in the main-line commodities is Rich Tokheim of Omaha,
Nebraska. He charges from $90 to $500 for a recommended seasonal trade or
trading approach or spread idea, most of which are based on seasonal
variations.
- Another idea I've mentioned to this group before is to subscribe to
"Consensus," a weekly newspaper out of Kansas City. After a year of careful
note-taking, you will have compiled a spreadsheet of seasonal trends as noted
by Merrill Lynch, Prudential, Meyers on Futures, Hightower, A.G. Edwards,
Allendale, Margraf, CRC, Ing, Linnco, Commodity Review, The Reaper, Commodity
Insight, etc., etc. It's a great publication anyway, and the only
disadvantage is that the info. is history by the time it's published, for the
most part. But take Corn (my favorite commodity). In the July 4
"Consensus," which I received by mail Mon., July 7, you can read (for Dec.
Corn) that:
- Allendale expects a July rally, with lows of 220 by the Fall; "hold
puts."
- Commodity Review says rallies to 241/246/250 may happen and should be
sold.
- Ing says it doesn't want to short at 240 because it's too early, but
225 later.
- CRC says buy 270/280 puts; traders are sidelined, looking for
near-term bottom.
- Prudential says play a weather scare possibility by buying Sept calls;
220 later.
Wow! That's just in one issue. So you get all these honchos telling you the
seasonal effects on Dec. ("new crop") Corn of July weather patterns.
Everyone expected a bounce and - guess what - thereupon (after publication)
ensued a (so-far, i.e., before the market opens today, Thurs., July 10) 3-day
8-cent rally ($400 a contract). They are also telling you the fundamental
trend (down). Additionally - I didn't mention it above - Margraf, a
technician, weighs in with all the support and resistance numbers, calculated
for your trading pleasure.
Good luck.
Larry
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