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Central Missouri | Po. its all in the dollar and flow of dollars at this point imo. The carry trade may allow things to happen that make no fundamental sense. That is why I have turned to the technicals. Here is the dollar
http://www.agrichartsmobile.com/markets/chart.php?page=ccharts&sym=...
Note the macd is short. There is a double divergence in the rsi. If the macd turns higher we may have a dollar rally but if we go to new lows with-out a reversal look out below. If the dollar tanks the grains may be a huge beneficiary per the resons above irregardless of the fundamentals. We are in very interesting times.
To add a few thoughts. IMO the administration will continue to allow the dollar to devalue which in turn will allow most markets to go up. The main reason for this is that we HAVE to have the dollar carry trade to allow liquidity for investment in the markets. This is ALL because if the markets don't go up the entire banking industry will implode. A large percentage of banks have an asset to liability ratio below 1. They are insolvent. To correct this you have to have the real estate market increase or they have to make profits in some other way.
To stabilize real estate and create profits through the carry trade interest rates have to be kept at zero for the to big to fails and the dollar has to keep declining. There is no other way in my mind.
Now if we would happen to have a major drought next summer, grain prices will look like a volcano.
Just some things to consider.
Edited by ehoff 11/16/2009 10:56
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Soft Red Winter Wheat
