iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
22,662 Blog Posts

Commodity Bust is BAD For the Market

Watching FCX , Potash Corp./Saskatchewan (USA) [[POT]] , Agrium Inc. (USA) [[AGU]] , Monsanto Company [[MON]] , Southern Copper Corporation (USA) [[PCU]] and a myriad of other commodity related names trading lower screams panic to me. Apparently, lots of funds and investors are getting punched in the scrotum, as the last place to hide (commodities) gets obliterated.

Believe me, no one hates ag more than me. I’ve had my battles being short POT/long [[SMN]] for ages, waiting for the collapse to occur. However, initially, a fierce breakdown in these names is tragically bad for the market. Understand, people have been hiding in these names. Take that away, and you have a new round of wealth destruction.

A true bear market, if I may be so bold.

Bottom line: If you are long commodities, you might as well get hedged by going long SMN or [[DUG]] . And, at the same time, be prepared to scalp a quick trade, vulture style, off the bloodletting in stocks like FCX.

Overall, this dive may prove to cast a very negative shadow over Wall Street.

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28 comments

  1. punyandy

    Yes, it if bad.

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  2. ryan grant

    what is holding up the indexs? a look at my screens looks like dji should be down 300..

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  3. Kiwin

    Freeport-McMoRan Copper & Gold Inc?

    You could say that again, no?

    Ryan: oil & natty (diesel) shit the bed, apparently some hedge fund may have blown up.

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  4. Donny

    What a great day … most things are working very well for me … just as I knew they would!

    Crude still has significant downside risk from these prices. All the commodities are gonna get crushed, and AG is more hype than anything else. That little cockroach, Potash, is going to the shit hole.

    DUG +8%
    SMN +10%

    No asset is protected … thanks fuckers.

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  5. ryan grant

    industrials aye?

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  6. Dinosaur Trader

    Everything is being sold, yes, but the volume is light. It feels like we’re setting up for a very scary autumn. Ironically, the IBD has us in a confirmed rally… go figure.

    Where are the leaders?

    -DT

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  7. Vince Lombardi

    Dang. I wish I bought September puts at the open instead of August.

    I got into Aug puts at the open in FRO and AGU. September on DRYS and ESV. Now I really can’t be too flexible with 11 days till expiration.

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  8. matt
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  9. nik

    fly, you are really bad with your timing, is your time machine from gm?

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  10. matt

    Scrotum punch! Love the color commentary!

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  11. The Fly

    Fuck you Nik.

    How about I get in my time machine and punch your eyebrows off yesterday?

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  12. CubsRock

    lol

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  13. Donny

    Where are the leaders?

    Great question, Dino Trader.

    There ain’t any leaders. The world economy is going to a very, very, dark place. A place where all assets, are discounted substantially … a place where market forces skull fuck energy & commodities … a place where uninformed, fuckfaces, are taken to the shed, and raped!

    Welcome to the new world … it’s no place to tread lightly.

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  14. Scum Bucket Bitchez
    Scum Bucket Bitchez

    No leaders? WTF? What about WM, WB, BAC?? They’re leading straight into the pit of Hades.

    Oh, you mean to the upside? Well, I would say HUM, but I think it’s just bounce.

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  15. bpoe

    It looks like all the rich people went to China and are letting their Kids and Servents trade. It must be nice.

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  16. DSB

    FCX getting “Canadian Greyhounded” today.

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  17. Granpa

    Donny, is there a number on DUG where you would sell it?

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  18. Jakegint

    I like HUM long term.

    HUM may become the gummint one of these days.

    You think I jest.

    I do not.

    ___

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  19. Danny

    DT – we’re in a rally because the iBC Machine sez we iz.

    Back in 2006 or 07 I made a lot of money in HUM, selling at 80. I really like[d] that stock.

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  20. Donny

    Granddad

    I bought DUG for 29.10 on July 3rd. I have no price target … I place a 5% stop behind all my positions at purchase, then change it to a 15% running stop once the position starts to roar.

    DUG is roaring, as is SMN.

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  21. BUSTER

    Something up with BOOM?

    Lots of accumulation in the last hour.

    Hmmm…

    PV 26:11 “As a dog returneth to his vomit, so a fool returneth to his folly.”

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  22. Aris

    i love that they’re still on cnbc saying we’re near a ‘bottom’ and housing is close to stabilizing.

    funny. just a couple of weeks ago, we had a year’s worth of inventory sitting vacant. i was unaware that prices continue to go up when supply outstrips demand.

    and even stranger is the lack of condominiums in these reports. i can throw a rock from my seattle window and hit no less than 5 vacant condos. a quick walk downtown has several skyscraper condo-fests completely empty with giant banners attached to the roofs with the phone number to call.

    i thought the PNW was the ‘growth’ part of the country.

    oh, and the real estate fiasco has caught up with boston now. funny…when i lived there, your house would sell before it was even listed, and apartments on craigslist typically rented within 12hrs. now? not so much.

    why aren’t they talking about this:

    “Aug. 4 (Bloomberg) — Citigroup Inc. reported its first loss since at least 2005 on credit-card securitizations, signaling that risks may be growing in a business that generated $3.5 billion of revenue in the past three years.”

    oh, right, they bid C up on that news, because some pissant hedge fund took an oily dump today.

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  23. Granpa

    Thanks Donny. Got mine way back on 4/9 for 34.49. Been too long for too little, getting itchy.

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  24. recusancy

    What’s the IBC expectations going into the MVIS CC tomorrow?

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  25. Juancho

    The leaders are too busy reading Barron’s and lighting their cigars with $100 bills.

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  26. SatanicChihuahua
    SatanicChihuahua

    Goldman thought it necessary to reiterate their underweight financials/long energy last week. Oil kept going down, so a couple of days later they reiterated their $149 year end oil price target.

    I can’t be the only one who thinks they are on the wrong side of these trades. Yet the stock is hanging in there.

    Odd, no?

    That long energy/short financials trade was one of the most crowded trades ever.

    There’s got to be alot of dead bodies floating around.

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  27. Little wee wee

    I quit
    I give up
    Nothing’s good enough for anybody else,but me.

    Name that tune?

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  28. Gio

    Yeah, IBD still printed confirmed rally. They did that off of 1 follow through day (FTD). since then, the market has got hit. Oil no longer correlates with the overall market, in other words “a decline in energy prices does not mean consumers will go shopping.” Here in hawaii, gas is down a huge gigantic 2 cents. This is just a correction in energy, and I’m patiently waiting for the rally to get back on track. Right now, I’m keeping all energy plays small unless they are day trades.

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