Archive for the ‘Agro’ category

The intuition system

High mathematics downplays intuition as unsystematic, emotional, and unaccountable. However, the more we move into time systems and try to mechanize entries and exits, we realize that we can never eliminate risk. Execution is about intuition.

At the heart of things we are all investors, whether some of us are overdoing it with housewife calls or calling ourselves knowledge workers who have nothing to do with markets, we are a part of the same chain. Stock market intuition is a high skill for life. We confuse it with speculation and all that herding.

First and foremost, the intuition system is not very fast moving. If you think you have one, it should not give you calls every day intraday, it should be more like a multi month, maybe 18-24 month system or more. Intuition systems are not more about trends.  Intuition systems guide us with understanding minimal risks. What is a minimal risk entry or exit?  Intuition systems are also built on patience. You can’t have an intuition system based on stress related to certain expiration. Intuition system is something which gives you the confidence to buy puts, bleed but rollover at expirations. If you are bleeding every 18 months, it is a minimal risk, not high risk. If you are doing puts and calls every month, you have no intuition system.

The problem with intuition systems is that they are generally about a crash or scary bubbles. A real intuition system works both ways, telling you to buy in Mar 2009 or telling you to sell now in Nov 2010. A test of intuition systems could be if it can differentiate between underperformance and outperformance. But then intuition systems can’t do everything.

The performance ranking we have mentioned on prior occasion is a good decision support for intuition systems. The best of the best are too be avoided and the worst of worst are to be selected. This simple idea can give you the courage to listen to your intuition if you think gold, silver and metals are really overstretched.  It could avoid a loss, when you are short sugar, short cotton as they continued to rise exponentially. It could be a test of nerves, but that that’s how intuition systems brave. The crack on sugar and cotton reinforced the system for all who believed like us that Agro was a best sell. We are still running the long Natgas – Short Sugar pair. As anticipated our best short on Banks, Auto and LIC Housing mentioned by Anna in the India pair grid are still running. Our annual rankings suggest Suzlon, Reliance, Reliance power are the best holds. And yes our intuition systems are looking for best shorts.

Alpha is a daily strategy signal product that gives long only, short only, pair trading signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are carried over minor (10-30 days) and intermediate (above 30 days) time frame. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. This is a part of the time triads analytics developed by Orpheus Research.

Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the Orpheus Research products.

Performance cycles (Rieki) is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. Time arbitrage, Time Triads, Time fractals are terms coined by Orpheus Research. Rieki is a bounded oscillator that moves in a range say from 1 to 30. 1 is top relative performance and 30 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

Time is a social construct and we see time through the life and nature around us. Understanding time can not only give a unifying theory to research of a few thousand years, but also help us understand the world we live in. Time evolves, oscillates and continues. Time comes before everything, but we don’t see it. We just feel it. We believe what we see and this is why understanding what we don’t see is a challenge. Understanding time could bring more than a conventional thought down, it’s a revolution, which could rock the very foundation of economic thought or the geometric structures Euclid laid down in 300 BC. We are at the start of the journey, but if time is indeed the real mathematics, we could see high accuracy in time forecasts.

Stop loss and exits are activated at 4%

Coverage India: BSE500 stocks, Indian Indices, Commodities, Currrency and Bonds.

Michesan Anna-Maria, the columnist for the WAVES.INDIA weekly and Head of India Research. Anna discovered her interest of markets immediately after completing her graduate studies in Economics. She followed it up with post graduate studies in corporate finance. A host of research work in behavioral finance, option strategies and quantifying market sentiment followed. Anna covers Indian equity and combines Elliott, Time Fractals and Time Analytics to deliver accuracy across time frames. To review some of her work, check out the annual India accuracy report 2009.

India Accuracy Report 2009


Alpha Global - The Pair Grid

A technician always has a challenge of coverage. We are trained for speed to spot opportunities. One can look at BSE 30 components, but looking through BSE500 or say RUSSELL 3000 chart by chart is a tough task. The information is growing exponentially like everything else and systems are needed to know where to look.

Orpheus Performance cycles are a novel way to manage a large universe of coverage that works on the idea of mathematical time and cyclical performance. The worst performers should outperform and best performers should underperform.

Today we have matched the best with the worst in the pair grid. The horizontal menu is the top performers and the vertical components are the worst assets. Alpha Global covers 120 assets. This includes commodities, currencies, DOW 30 components, Global Equity Indices and sector representations.

This feature is written for Association of Technical Market Analysts

Enjoy the latest Alpha Global.

Alpha is a daily strategy signal product that gives long only, short only, pair trading signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are carried over minor (10-30 days) and intermediate (above 30 days) time frame. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. This is a part of the time triads analytics developed by Orpheus Research.

Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the Orpheus Time Analytics research products.

Performance cycles (Rieki) is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. Time arbitrage, Time Triads, Time fractals are terms coined by Orpheus Research. Rieki is a bounded oscillator that moves in a range say from 1 to 30. 1 is top relative performance and 30 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

Time is a social construct and we see time through the life and nature around us. Understanding time can not only give a unifying theory to research of a few thousand years, but also help us understand the world we live in. Time evolves, oscillates and continues. Time comes before everything, but we don’t see it. We just feel it. We believe what we see and this is why understanding what we don’t see is a challenge. Understanding time could bring more than a conventional thought down, it’s a revolution, which could rock the very foundation of economic thought or the geometric structures Euclid laid down in 300 BC. We are at the start of the journey, but if time is indeed the real mathematics, we could see high accuracy in time forecasts.

Stop loss and exits are activated at 4%

Coverage Global: Dow 30 components, Global Indices, ETF SPDRS, Commodities


Sugar, Carbon Rieki Structures

REUTERS RICS:  SUGA.L, CARB.L

Performance cycles is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves in a range say from 1 to 50. 1 is top relative performance and 50 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

Vivek is a qualified Chartered Accountant (Institute of Chartered Accountants of India). Vivek is passionate about Technical Analysis, a self taught Elliott Wave Technician. He conducts technical analyis on a variety of financial instruments on his blog vivekoutlook.blogspot.com. He will be covering commodities for Orpheus Research.
Vivek has worked with BDO Consulting in Oman, as Business Consultant working on feasibility studies for expansion projects for companies. He has worked with Irevna – Division of CRISIL conducting fundamental analysis - sell side analysis - of Information technology companies.

Rieki is negative on the Agro complex

WAVES.AGRO is a perspective product published once a month. The report covers Coffee, Sugar, Cocoa, Wheat, Corn and related FUTURES. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators.

REUTERS RICS:  SUGA.L, WEAT.L, CORN.L, SOYB.L, AIGA.L,  COTN.L, AIGL.L, COFF.L, GRAF.L

Performance cycles is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves in a range say from 1 to 50. 1 is top relative performance and 50 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

Vivek is a qualified Chartered Accountant (Institute of Chartered Accountants of India). Vivek is passionate about Technical Analysis, a self taught Elliott Wave Technician. He conducts technical analyis on a variety of financial instruments on his blog vivekoutlook.blogspot.com. He will be covering commodities for Orpheus Research.
Vivek has worked with BDO Consulting in Oman, as Business Consultant working on feasibility studies for expansion projects for companies. He has worked with Irevna – Division of CRISIL conducting fundamental analysis - sell side analysis - of Information technology companies.

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Member's post - Sugar to go up

I am an ardent follower and admirer of Orpheus Research. I was checking the $DJASB (DJ Sugar Index) and noticed a possibly 2 year double bottom on sugar ETF index. This is could be largely positive for stock. I noticed that the top of index (Dec 09) odd and is similar for Sugar stocks. Plus all sugar stocks have been badly beaten down, something like either wave a or wave i of a larger degree down wave. Seems, that these stocks are poised for bounce, which can be fast. Just as an example attached Bajaj Hind Chart and similarly, the chart of Balrampur chini has the same story.

Let me know, your thoughts on the same.

Regards,
Vivek Marne

The Sugar decay


Waves.Agro - Wheat at lows

We at Orpheus have a habit of looking at top losers carefully, as real value occasionally lies with top losers. Wheat was the top loser among the agro complex registering 27% losses in the last 12 months. Sugar on the other hand was the top gainer for the respective period. The strategy of buying top losers and selling top winners at the same time every year might look poor, but back testing might throw some surprises. On this basis long wheat, short sugar might look like a workable strategy. We will cover this strategy on Alpha Agro in the weeks ahead.

Coming back to absolute performance, this is what we said on 5 Feb 2007, “Killing the Cotton farmer - While Dow Jones Cotton Index is finishing a multi year and a multi decade bottom. We anticipate supports coming in on the intermediate time frame.” Nov 2008 cotton bottomed and has been rising since then. Cotton closed the year with the second largest gain in the agro complex at 34%.

This is what we said on 27 Aug on Sugar, “The soft has been falling internationally from the last seven quarters, but the negative news about sugar barons miseries, output glut only mark the sentiment landscape from the last two quarters, while prices internationally have been stagnating near $10. Negative news could not push prices lower. We continue to see this as a low risk entry point for sugar too along with coffee and cotton, all of which should see better prices ahead.”

What happened? Barring Coffee which is still below 2007 prices, cocoa and sugar pushed up from Oct 2008 to Jan highs up 140% and 90% respectively. We also mentioned about how equity play works contrary to cocoa and sugar. As equity markets came under stress the two soft’s took off. Wheat looks to be bottoming and we continue to look at entry levels on the grain. The latest WAVES.AGRO carries updates on the agro commodities along with their respective performance cycles.

Enjoy the latest WAVES.AGRO.

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ORPHEUS GLOBAL RESEARCH

WAVES.AGRO is a perspective product published once a month. The report covers Coffee, Sugar, Cocoa, Wheat, Corn and related FUTURES. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators.

REUTERS RICS: COFSAN-4-NYC, SUG-DLY-ISA, .DJAIGCT, CCCI-NYC, CORN.L, C-US2Y-GULF,.SPGSCN, W-RJK-MLQ, .DJAIGWHTR.

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA


WAVES.AGRO - THE SWEET BULL

Sociologists should answer this question. How can the bull be sweet? And why is this bull eating a lot of chocolate? Both COCOA and SUGAR are at a new high. Socionomics as a subject explains how the society consumes less sugar in a bull market as the society gets calorie conscious. When the bear market starts sugar consumption increases as people care less about calories and more about the depression that the slowdown creates. So according to Socionomics, are we are in a secular bear market, with minor bull legs in it or there is something wrong with the theory?

According to cycle work that we highlighted in ‘A DOW THEORY’ we talked about just a bull leg into 2010 early 2011 followed by a final bear drop into 2012. If our interpretation of cycles are correct along with the sugar, cocoa most of the other agro assets should do well in the coming times. This also means that the food crisis is far from over even if it there are less news about the agro complex these days. The very fact crisis is less related to food currently is also because most of agro assets dropped on average 61.8% from all time highs. Few assets like sugar and cocoa have rebounded while wheat, corn, oat and soya are showing signs of new bull market legs and are at low risk entry points.

Agro remains a very key space to watch and the crisis on food is far from over. The latest report on agro assets carries primary Elliott counts for the respective assets. About the bull being sweet, at least till now it seems so.

Enjoy the latest WAVES.AGRO

Login for orpheus.asia member’s area here.

ORPHEUS GLOBAL RESEARCH

WAVES.AGRO is a perspective product published once a month. The report covers Coffee, Sugar, Cocoa, Wheat, Corn and related FUTURES. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators.

REUTERS RICS: COFSAN-4-NYC, SUG-DLY-ISA, .DJAIGCT, CCCI-NYC, CORN.L, C-US2Y-GULF,.SPGSCN, W-RJK-MLQ, .DJAIGWHTR.

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA


Food Crisis Updated

If WHEAT is down 34% (back to 2007 levels), SUGAR is down 28% (sub 2005 levels), COCOA is down 20% (back to 2003 highs), COTTON is falling since 1995 and is down 87%, CORN is down 34% (back to 2007 levels) and even COFFEE which we gave a positive upturn reco in MAR 2007 (after which it turned up 60% from sub 100 levels to 160) has also retraced 19% from its historical highs. The bean is back to 2005 levels. So one can wonder about what happened to the food crisis? Is it over now that agro commodities are falling again.

Markets are a lot about patience and timing. The people who cry about food crisis are definitely not speculators who profit from rising food crisis. Noise is always tough to quantify. This is why we were early when we were speaking about the agro bull being already seven years old and the current rises finally pushing the prices lower than higher, it all seemed so strange. We wrote about this in Jan 2007 (Westernisation of Asian Diet).

Now after agro prices are back to 2007 lows and in some cases back to multi years lows, agro commodities need a review. First and foremost, even if on a multi month basis prices are down, the cycle (multi year) uptrend on agro prices is far from over. What happened was a normal retracement, which is now pushing most agro commodities into consolidation zone. The conventional head and shoulder on wheat may suggest it is over for the grain, but for us at orpheus this is a classic previous iv support zone. And the down move on wheat is an ending correction, after which the multi year uptrend should re-exert itself again.

The latest issue of WAVES.AGRO carries ANTICIPATED and HAPPENED case on COFFEE. An updated view on COTTON, CORN, SUGAR, WHEAT and a few different fractals of different time frames. We also carry an updated tracker at the end of the report, which carried the preferred MINOR TRENDS on the the various assets.

Enjoy the latest WAVES.AGRO

[bold]WAVES.AGRO[/bold] is a perspective product published once a month. The report covers Coffee, Sugar, Cocoa, Wheat, Corn and related FUTURES. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators.

REUTERS RICS: COFSAN-4-NYC, SUG-DLY-ISA, .DJAIGCT, CCCI-NYC, CORN.L, C-US2Y-GULF,.SPGSCN, W-RJK-MLQ, .DJAIGWHTR.

wavesagro150908 DOWNLOAD THE REPORT

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA


The Coffee Fractal

The Coffee God has woken up and he has decided to punish coffee lovers. The bean is set to rise for more than a few years to prices which not many of us can relate too.

Cycles and Fractals are a part of nature and date back before everything. Fractals of population were discovered 200 years back, and then came fractals of mass psychology discovered by Charles Dow in 1880s. And now scientists have joined the ranks with Fractal research, as few as 30 years ago. It may take another 15-20 years for fractals to become more popular, maybe more popular than what they are now. But stock markets or mass psychology fractals may never get popular despite all the amazing accuracy that they give. The force of the herd is strong, overestimation of personal skills normal, anchoring on to fixed ideas easy, believing that markets work on fair value science and every profit is linked to coming news are axioms the society considers the ultimate truth. To stand against all this beliefs and also trash them and say it’s all a fractal is gibberish.

But then, it works. What one needs is internet, a trading system, market and fractal watching experience, a few rules, ability to stand against the herd and a cup of coffee. Well most of these things can be acquired, even market experience. What is the toughest however is the cup of coffee and ability to sip it is alone and following the few rules.

Coffee has increased 60% (Since Dec 2007) on New York spot and 77% on MCX Robusta (Since Apr 2007). This was another high growth asset with another late news, which came more than a year late. It was here in Dec 2006 we mentioned about the emerging bean (The Coffee God). And then in Oct 2007 when we said that all the sideways action of coffee has come to an end and it’s time for the bean to go up more than 100% in about 12 months. While the prices have been growing the world’s largest coffee chain, Starbucks is coming under workers union pressure. This might look coincidental, but American customer is more sensitive now to coffee prices than a few years ago, when recession talks were unheard off and the state was not giving bailouts.

And mind it, this is just the beginning. We are in the first quarter of 2008 and coffee is already creating news. And the time ahead will indeed get trickier and tougher for coffee lovers and coffee chains. The consumers either have to become contrarians fast enough or stop drinking coffee. Both the things go together. You can’t get consistently wealthy if you are not an independent thinker and a contrarian. And if you are not rich you can’t afford the Starbucks cup every day, ok, twice a day. 100% rise from sub dollar 100 levels was our short term target. We see coffee becoming a luxury with long term targets three times higher than Oct 2007 lows.

This means we are indeed headed for a shakeout. It’s like oil, when it goes up a little, it’s good for the oil producing nations, for some companies and a little expensive for other business as cost goes up. But when oil goes up higher, it’s bad for all, as people start to innovate, start using alternative fuels, basically price elasticity. The higher it goes, the more consumer behavior it changes.

Now replace oil with coffee, the higher it goes, the more it will hurt. Maybe it’s still early to talk about the rupee 300 coffee mug. But “stop buying expensive coffee and save calculators” are already available on the web today. The coffee lovers are questioning the sanity of buying coffee from stores every single day instead of just contributing to the local “coffee pot fund”. Hugh U. Chou, of the local coffee pot fund fame also accepts that office coffee may not stack up to the store bought versions, but is it really worth the long term costs?


Coffee on a high

Time magazine recently wrote a story on the human addiction. And out of the many addictions, to alcohol, sex and gambling, the write-up also mentioned coffee. And how there are withdrawal symptoms if you stop having your morning cuppa. I would have laughed about this addiction to coffee five years back, but today I don’t. I am a believer, of the coffee cult and the coffee revolution.

The bean has acquired a mega status. Coming from a tea-drinking nation the changeover was not easy. Barista and Cafe Coffee Day did bring a change in me, but it was moving to Europe which did the rest. A daily Espresso was unthinkable five years back, but it’s a part of waking up now. Coffee has got us addicted to such a stage that having Illy coffee and a 1000-dollar coffee maker for home and office are not stupid ideas.

Then there is this revolution which has just begun. You might not have heard of it in your morning newspaper. But the news is that coffee internationally has moved to a new eight-year high. And this is just the beginning. We will not be surprised if the next nine months see the bean moving up at least 50 per cent from here.

Technically, we have a classic rounding bottom pattern which projects targets near $180, up 100 per cent from recent lows at sub-$100. Even MCX Coffee Robusta Spot is at a six-month high above Rs 8000. We consider this a low-risk entry point. Your coffee cup should never be the same again. We are early believers so we ordered our stock on the breakout. You should get yours too.


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