Cold As Ice

 

Trader Scott’s Market Blog

While I assume that the geniuses from the Social Justice Warrior “movement” would claim I’m a climate change denier, I do actually believe in “climate change”.
But as opposed to the believers in the trendy “theory” of climate change, anyone with an IQ above an earthworm knows we’ve had climate change on this Planet for eons.

So is the Earth currently warming or cooling or neither or both? I believe the weight of the evidence is that currently the earth is in a cyclical cooling phase.

And what does this have to do with markets? Well specifically to agriculture, maybe nothing or maybe a lot. I understand the last statement is completely useless.
But that’s the point. Everything I’ve written so far should have nothing to do with your judgement regarding markets – specifically RIGHT NOW is the RISK low enough and are thePROBABILITIES high enough to justify an investment.
I am wildly bullish long term on agriculture, but neither global warming (nor global cooling) will influence my wager/bet/investment in any way.Only my judgement on what the future TREND of agriculture will be has any bearing on my actions. And that judgement is generally based upon my analysis ofthe SUPPLY/DEMAND situation. That’s where my constant repetition about learning the interaction between PRICE and VOLUME on a chart fits in. That is by far thebest way to determine when, where, how long and how far the next big move in a market will be. And I’ll repeat – the master of all of this was the greatRichard Wyckoff.
Below there is a chart of wheat going back 40 years. Most agriculture markets are showing the similar tendency. What I believe is going on is a humongous area of accumulation.
I previously wrote starting several years ago (archived), that I did expect that in general the commodity bear market which began in 2009 would end in the Spring of 2016, which I maintain still.If I’m correct (and I, of course, believe that I am, but we will eventually find out), then agriculture is embarking on a massive bull market/uptrend. Of course, the question which is alwaysof utmost importance to me: “When will the big moves higher commence?” No one, especially myself, knows the exact answer to that. This is all about the concept of RISK.So what I do is to use myexperience in judging SUPPLY/DEMAND via PRICE and VOLUME (shown on the chart below). And I do believe DEMAND is taking control of the market.Therefore, I am using price weakness to add to my position at SUPPORT to buy the RJA ETF. RJA is shown in the second chart below – a ten year weekly chart.
So to recap. I do believe the Earth is cooling. But in no way is that why I’m investing in agriculture. I’m investing in agriculture, because of my belief in a huge ACCUMULATION area,which will lead to a massive bull market. And the RISK is currently justifying beginning to buy into weakness at SUPPORT.
HOWEVER, any extreme temperature changes will only serve to supercharge the potential UPTREND. And I always like to have that potential turbo charger behind me when I make any investment.Like when I bought gold in 1999, 2008, and 2015/16 specifically gold stocks, like GDX and GDXJ or when I bought US Govt. Bonds in 2000 or when I bought stocks in 2009.(Look at the archives where I discussed these many times.)All of these purchases were made because of my belief in a massive bull market about to commence, but each situation had a particular turbo charger potential attached to it also.
And lastly I included an article which made me chuckle, but I’d imagine the trendy climate changers won’t want you to read. The article from the Daily Caller is shown below.

Cold as ice 1

Cold as ice 2

Submitted by Craig Boudreau via The Daily Caller,

A group of adventurers, sailors, pilots and climate scientists that recentlystarteda journey around the North Pole in an effort to show the lack of ice, has beenblocked from further travels by ice.

The Polar Ocean Challenge is taking a two monthjourneythat will see them go from Bristol, Alaska, to Norway, then to Russia through the North Eastpassage, back to Alaska throughthe North West passage, to Greenland and then ultimately back to Bristol. Theirobjective, as laid out by their website,was todemonstrate“that the Arctic sea ice coverage shrinks back so far now in the summer months that sea that was permanently locked up now can allow passage through.”

There has been one small hiccup thus-far though:they are currently stuck inMurmansk, Russia because there is too much ice blocking the North East passage the team said didn’t exist in summer months, according toReal Climate Science.

Real Climate Science also provides a graph showing thatcurrent Arctic temperatures — despite alarmist claims of the Arctic beinghotter than ever— is actually below normal.

The Polar Ocean Challenge team is not the first global warmingexpeditionto be faced with icy troubles. In2013, an Antarctic research vessel named Akademik Shokalskiybecame trapped in the ice, the problem was so severe that they actually had to rescuethe 52 crew members.

In2015a Canadian ice breaking ship, the CCGS Amundsen, was forced to rerouteand help a number of supply ships that had become trapped by ice.

The icy blockade comes just over a month after an Oxford climate scientist, Peter Wadhams, said the Arctic would be ‘completely ice-free’ by September of this year. While it obviously isn’t September yet, he did reference the fact that there would be very little ice to contend with this summer.

“Even if the ice doesn’t completely disappear, it is very likely that this will be a record low year,”Wadhams toldThe Independentin June.

Wahdams says he expects less than one million square kilometers by summers end, but the current amount of Arctic sea ice is 10.6 million square kilometers, according to data from the National Snow and Ice Data Center (NSIDC). The NSIDC puts the rate of ice loss for June at just about 60,ooo square kilometers a day. If that number were to hold, it would take approximately 160 days for the Arctic to dip down to the predicted one million square kilometers.



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'Trader Scott – Cold As Ice – July 27, 2016' have 4 comments

  1. July 27, 2016 @ 8:20 pm Stu the Canuk

    Scott, you can apply much of what is technical analysis for stocks to climate. The difference is that time cycles are very different. Geological time is very long.
    As in major stock market tops and bottoms, variability in climate has hit.
    Last 100 years of climate history up till the last decade has been extremely unusually stable, relative to previous history.
    Science in this area is advancing very quickly over the last few decades with ice core sampling. Resistance has been as in other now accepted science theory is high with global warming. Linear thinking……..
    Again the majority is always wrong like in the markets.

    Reply

    • July 28, 2016 @ 12:41 pm scott

      Stu you appear to know quite a bit about the long term climate cycles. Are you well versed on sun spot activity cycles?
      Could you please email me and elaborate. My email: tomhn[email protected].

      Also, be careful about how to view the majority in markets. I’ll expand on that in a future post, as it’s a bit lengthy.

      Reply

  2. July 27, 2016 @ 10:20 pm Julian

    Hi Scott, thanks for your blog posts they are very helpful. About your statement “So what I do is to use my experience in judging SUPPLY/DEMAND via PRICE and VOLUME (shown on the chart below). And I do believe that DEMAND is taking control of the market. Therefore, I am using price weakness to add to my position at SUPPORT to buy the RJA ETF.” …

    I was wondering if you could elaborate on how you judge supply and demand via price and volume ?
    I was also wondering if you can explain or even mark on the graph where you would draw your support levels ?

    Thanks Julian.

    Reply

    • July 28, 2016 @ 12:48 pm scott

      Yes Julian, I am going to start marking up the charts that I show here, just as I do with my own work.
      Secondly, being able to judge the interaction between price and volume on a chart takes years of study. It’s why very few, even professionals, understand it. It’s easier, but in no way the same, to use the popular technical analysis software. I don’t use any TA software indicators. But, I have constantly repeated that folks who want to learn more need to read anything by Richard Wyckoff.
      Having said that, if enough people show interest, I may do a mini course about these topics.

      Reply


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