2011-06-14th (Tues)

At the end of the previous trading session I had the following position;
Long 20 contracts US Crude July 2011 with ACB of 98.545

US markets rose today mostly due to a Bear Rally reaction to less than expected drop in Retail Sales.

Economists were expecting a larger decrease than only Negative 0.2% (percent) in May.

A negative number is still a negative number.

Article - "Oil gets lift from China, U.S. economic data"
http://www.marketwatch.com/story/oil-futures-gain-as-dollar-declines-2011-06-14?siteid=yhoof

Article - "Dollar mixed after better-than-expected data - Dollar down against euro, pound, up against yen after better-than-expected economic reports"
http://finance.yahoo.com/news/Dollar-mixed-after-apf-3429098305.html;_ylt=AgWBPQMroH2n0W2fgILEBCixba9_;_ylu=X3oDMTFlMDB0YzZzBHBvcwMyOQRzZWMDbmV3c0h1YkFydGljbGVMaXN0BHNsawNkb2xsYXJtaXhlZGE-?x=0

If we assume the central bank of China's target inflation rate is 4% then we should expect continued tightening action.

If concurrently the desired GDP growth is 6% then it will be an extremely hard juggling act of injecting stimulus money in desired sectors of the economy, while building flood gates to prevent spill over of hot money into undesired sectors of the economy.

Personally I am not aware of any Monetary Policy that can achieve both outcomes concurrently, it must be accompanied by Regulation, Fiscal Policy of higher taxes and reduced spending.

Article - "China raises bank reserves to contain inflation - China raises bank reserve ratio again in fight against inflation"
http://finance.yahoo.com/news/China-raises-bank-reserves-to-apf-1651060871.html;_ylt=AkP5dgKlmAO4D7s5FUPsZEuxba9_;_ylu=X3oDMTFlNWZpb2d0BHBvcwM2NgRzZWMDbmV3c0h1YkFydGljbGVMaXN0BHNsawNjaGluYXJhaXNlc2I-?x=0

Article - "China food costs push inflation to 5.5 pct in May - China food costs push inflation to 5.5 percent in May; forecasted to rise further in June"
http://finance.yahoo.com/news/China-food-costs-push-apf-2600755977.html;_ylt=AidNlfLBInj16loSrEfDJYCxba9_;_ylu=X3oDMTFlc2JoOTIwBHBvcwM4OARzZWMDbmV3c0h1YkFydGljbGVMaXN0BHNsawNjaGluYWZvb2Rjb3M-?x=0

Ultimately as a Trader only the trades matter.

Wheat looked interesting to me today.

Buy-To-Open 10 contracts Wheat July 2011 at 740.00 (2011-06-14, 10:32 am EST)
Buy 10 contracts Wheat July 2011 at 730.00 (2011-06-14, 10:43 am EST)

Currently I have the following positions;
Long 20 contracts US Crude July 2011 with ACB of 98.545
Long 20 contracts Wheat July 2011 with ACB of 735.00

US Crude July 2011 is currently 99.626 (2011-06-14, 17:34 pm EST)
Wheat July 2011 is currently 732.00 (2011-06-14, 17:34 pm EST)

Total equity is 98% of June 1st, and an increase from previous.

Stay Tuned,

Jeff
(2011-06-14, 17:34 pm EST)