the message is loud and clear

  1. 9,081 Posts.
    The message is loud and clear for those who pull the stops out of their ears:

    "Flynn's Energy Report


    Phil Flynn
    Friday November 14, 2003

    Attention all futures traders! Welcome to the China syndrome! China has a ravenous appetite for raw materials to fuel their burning hot economy and it's pushing commodities prices to levels not seen in years. The markets are red hot and if you've ever wanted to jump in, this may be a great time! Call me to open your futures and options on futures account at 800-935-6487 and ask for Phil Flynn!

    Not only is China sucking up supplies of commodities, they are becoming one mean producing machine! More evidence of China's economic growth engine exploding came out yesterday when it was reported that the US/China deficit surged to a record 12.7 billion dollars. Part of that surge of exports from China to the US is textiles. China may reduce that number though because they are in the market for agriculture goods and other raw materials. At the same time, US exports were up by 2.4 billion dollars due to a decline in the US dollar. A weaker dollar makes it beneficial for foreign countries to come here and buy our goods cheaper. And what this all means for energy traders is demand for energy may be much higher than many expect.

    The market got a boost yesterday when the stocks data from the API and the Dept of Energy was released. The complex focused on the heating oil number which according to the DOE fell by 1.5 million barrels. The API reported and increase of 1.8 million barrels. Refining operations were down to 92.1% of capacity and crude oil supplies fell 800,000 barrels according to the DOE. The market took off and moved substantially higher.

    The move higher was sparked not just by the weekly stocks reporting but also because of continued violence in Iraq. We saw buying in the energies as well as in gold, silver and bonds and some of it may have been "safe haven" buying. It's difficult to separate out how much of the buying is geo-political in nature and how much is driven buy strong world wide economic signals. The fact is however, the buying is becoming more solid.

    We saw solid gains in natural gas too and it came on the heels of what most traders would call a bearish injection report. The Dept of Energy reported an injection of 32 bcf and that was higher than the average estimate of 20 bcf. But we had a bullish heating oil number and cold weather is coming through the Midwest and headed for the East Coast so the market just couldn't move any lower. Because of yesterday's action, the bears will have a hard time pushing it lower and we don't expect it unless the weather warms up. We may have established the seasonal low in natural gas that may hold for quite some time. We may begin to see a big short covering rally unless we see warm temps. There are day trading opportunities here and you can call me at 800-935-6487 and ask for Phil Flynn!

    Could it be? Yes, it could. Something's coming, something big, in the commodities markets! It has been many years since the commodity complex as a whole has shown such bullish action, but here it is in spades! Silver is hitting highs not seen since the year 2000! Gold hit a 7 year high, platinum's at a 23 year high. The agriculture products are red hot with beans getting close to the $8.00 per bushel mark. Wheat is above $4.00 per bushel and cotton was briefly above 80 cents! That's big! It's beginning to look a lot like a major shift in sentiment with a long road ahead reversing many years of falling prices to absurdly low levels. It appears we're going into a time of rising prices as the US dollar falls and demand drives this engine. US corporations will benefit because they'll have some pricing power for their products. We see this as the beginning of what may be a long term shift and a bull run for commodities. Don't be the last to get on board!"
 
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