Friday, March 7, 2014

Blame the Weather...3.7.14

Many farmers use the futures markets to hedge the price of their crops 6 months hence and the weather is usually the biggest factor in the risk equation. Last FALL was a neutral time for energy and a bear time for agricultural....but that's changed in a big way.

Its been obvious for a while that the record bad weather this winter has given the energy sector a real push and I mentioned the possible crop apocalypse this summer...with food prices already rising on grocer's shelves in milk, meat, cereals, honey, etc.  How to play the game?

I've talked about DBA (the agriculture ETF) previously and here's a little setup on M3 looking at the relative momentum in SPY, XLE and DBA.

Just go right to the last chart....what a ride!!!!....and it may not be over yet.
Note the short term ALERT has fired................