Andy_Hecht

Andy_Hecht

Commodities can be seasonal assets. Fuel and nutritional requirements tend to reflect the weather conditions during the times of the year that are cold and when the weather warms. As February ends and March arrives this week, the old saying that March comes in like a lion and goes out like a lamb. The oldest written reference to the “lion/lamb” proverb comes from...

Andy_Hecht

Crude oil came close to a triple-digit price last week for the first time since 2014. Natural gas prices have soared in Europe and Asia, and US prices rose to the highest level since 2008 when the February NYMEX futures contract spiked to over $7.30 per MMBtu in late January. The chicken and egg economic dilemma may be, which came first, inflation or rising...

Andy_Hecht

The Chinese New Year just passed, and we are now in the year of the Tiger. “May you live in interesting times” is often considered the translation of a traditional Chinese curse. Markets reflect the economic and political landscapes In 2021 rising inflation was at the center of the stage Inflation will continue to impact markets in 2022 and beyond ...

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Gold has been coveted by humans long before there were stocks, bonds, currencies, and other investable assets. The precious metal outdates the Bible’s old testament, with more than four hundred references to gold. Gold is a forever commodity as each ounce of the metal ever produced in the history of the world remains as part of the global stock. Around 197,576...

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The price of any asset is always the correct price because it is the level where buyers and sellers meet in a transparent environment, the marketplace. A price trend is the most accurate reflection of the market’s sentiment. When buyers are more aggressive, prices rise, and when sellers overwhelm buyers, prices decline. The stock market trend reversed The S&P...

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The lumber price was nothing short of wild in 2021. After rising to a new all-time high at $1711.20 in May, the price plunged, reaching a bottom at $488 per 1,000 board feet in August. Lumber fell to under one-third the price at the high in three months. Rates are heading higher Lumber has been rallying A spring scramble for new homes Infrastructure...

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It is official- Inflation is no longer “transitory,” according to the US central bank. After blaming rising prices on pandemic-inspired supply chain bottlenecks throughout 2021, the Federal Reserve swallowed its pride, admitting inflationary pressures are far more structural than “transitory.” Economist Mohamed El Erian called “transitory” the worst call in the...

Andy_Hecht

Crude oil is predictable, even though most market participants and pundits express shock when the price tanks as it has since November 26. The writing was on the wall in the crude oil market. The US administration is taking credit for falling oil prices- Begging OPEC and opening the spigot at the SPR Seasonal factors are at play- Inventories remain low ...

Andy_Hecht

I follow a technomental analytic approach to the commodities markets in a quest to determine the path of least resistance of prices. Each piece of a market’s structure provides a clue. When assembled, a picture tends to emerge, increasing the odds of success for long or short positions. The last in the series- We looked at the other components of market...

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Market structure is the various puzzle pieces that can reveal valuable clues about the path of least resistance of prices. Fundamental analysis involves pouring through supply and demand data to forecast price direction. However, market structure can simplify the process as each jigsaw puzzle piece will complete an emerging picture. Market structure reflects price...

Andy_Hecht

My introduction to commodity markets came in the 1970s when I was invited to work for the summer for the world’s leading commodity merchant company. In the 1970s, Philipp Brothers’ headquarters were in the heart of New York City. The company had offices all over the world. Where it did not have an office, it had a network of agents. Philipp Brothers bought...

Andy_Hecht

Last week, I wrote on processing spreads, a valuable tool that can provide clues about price direction. The price action in products that trade in the futures market like gasoline, heating oil, soybean meal, and soybean oil often tell us a lot about the path of least resistance for the crude oil and soybean futures contracts. This week, I will turn my attention...

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Some futures markets offer contracts that are related to others and are processed products of the commodity. Understanding the price relationships, history, and paths of least resistance of the processed product versus the original input can provide valuable insight into supply and demand fundamentals. Moreover, these relationships shed light on other related...

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Al Pacino played John Milton in the 1997 film the Devil’s Advocate. Milton ran a hugely successful law firm as a front. The fictional character was really the devil. The final line of the movie is, “Vanity is definitely my favorite sin.” Vanity is excessive pride in or admiration of one’s own abilities, appearance, or achievements. There is a fine line between...

Andy_Hecht

Traders and investors use different sets of tools when approaching markets. Some are fundamentalists, pouring through balance sheets, supply and demand data, and other macro and microeconomic information to predict the future prices of assets. Others have a strictly technical approach to markets, following trends and the path of least resistance of prices. Still,...

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Mark Fisher was a presence in the natural gas futures arena in the days before electronic trading, racking up profits that made him very wealthy. On Wednesday, September 29, Mr. Fisher told CNBC that he does not see the November natural gas futures contract coming off the board below the October contract, making the $5.50 to $5.80 level a bottom. He warned that...

Andy_Hecht

The fall months are my favorite. The cool weather is a welcome change from the hot and humid days of summer. There are few sights more pleasing than the turning of the leaves over the coming weeks as the change works its way from north to south as temperatures drop. The stock market has more than a few bad memories during the fall season. The great crash of 1929...

Andy_Hecht

We have been trading and investing in markets for decades since the early 1980s. Experienced and successful traders and market participants tend to remember their losses and mistakes instead of victories. Profits feed the ego; losses are teachers for those who realize that valuable lessons come from adversity instead of triumph. Everyone has an opinion- The...