The following content was authored by Gary Savage of the Smart Money Tracker. After reading this article, which was mailed out to his subscribers, I saw no need to write a mid-year review of my own, and Gary graciously granted permission for his work to be posted here, making him the first guest writer for The DOCument. I highly recommend his subscription service. For a measly $100 per year, subscribers get a daily e-mail loaded with perspective and common sense. Out of all the market letters I have sampled, Gary's is by far the best value. So, on to the good stuff...
As long time subscribers know by now, I think we entered a long term secular bear market for equities in 2000. During the 90s until 2000, stock valuations reached levels that can only be described as absurd. The S&P was trading at 44 times earnings. The Nasdaq at 100+ times earnings, and that is assuming that many of those companies even had earnings. As the bear market
started to pick up steam in 2001 and 2002, the Fed decided to fight the bear the only way they knew how and the way that had worked since 1980: by printing money. If something works for 20 years, can you blame Greenspan for falling back on the ole stand-by cure? This time, however, the patient had a disease that wasn't going to be cured so easily. In fact, it took two and a half years to stop the blood letting that could normally be stemmed in 3-6 months before.
At the same time that the stock market bull was dying, the commodity bull was being born. It was being born out of a growing supply and demand imbalance. Since commodities had been in a bear market during the time that equities were in a bull, infrastructure in the commodity markets during that period stagnated. If the product you sell is continually getting cheaper and cheaper and you are struggling to remain profitable, you normally don't waste money trying to expand production. So when the rest of the world (think the BRIC countries) woke up and started to grow rapidly, the neglected commodity markets weren't prepared to supply the increased commodities that were now needed. As reserves of everything started to shrink, prices started to rise. The central banks of the world exacerbated the problem by turning on the printing presses. Hey, everyone just followed Greenspan's lead. He had looked like a genius the past 15 years. Greenspan, however, failed to notice the signs this time. He failed to notice the emerging commodity bull. I seriously doubt it would have made any difference if he had noticed. The powers that be wanted the bear subdued in 2002, and the only way to accomplish that was to flood enough money into the system to put a floor under the markets. The plan worked. Well, for a while anyway.
The stock market rallied for 5 years in the second longest bull market in history. As usual, there is a price to be paid. Along with that rise came a housing bubble of historic proportions and a credit bubble of even greater dimensions. The sad thing is that when adjusted for inflation the rise in the stock market has been pathetic. In purchasing power at its top in Oct. 07, the stock market would buy roughly half of what it would buy in 2000. The bottom line is that the stock market hasn't really rallied all that much, and it certainly hasn't been in a new secular bull market. The Fed has just devalued our currency to make it appear the markets are increasing.
As I've said before, the fun part of monetary inflation is now over. Just printing more money is not going to levitate the stock market any longer. All it's going to do is increase inflation. Anybody who buys food or gas knows this one to be a fact, despite the government's claims of low inflation.
Now let's take a look at the awakening bear market. We obviously got the first leg down from Oct. to Jan. & Mar. which IMO signaled the 4 year cycle low. I now think we are now in the process of putting in the top for the next 4 year cycle. A left translated cycle by itself is very bearish for equities. A left translated cycle that tops in less than 5 months is incredibly bearish for stocks.
At the moment everyone, and especially the media, seem intent on picking the bottom of the housing market and financials. That's what happens in bear markets. People are forever stuck looking at the past and projecting it into the future. We see a 5-year bull market and assume that it will continue. Analysts are now busy explaining why the S&P is cheap. Compared to the 44 times earnings in 2000 sure the market is cheap. But at 21 times earnings on a historical basis, the market is anything but cheap. As a matter of fact, at 21 times earnings the market is still in the range where most historical bulls have topped out. Bear markets don't take valuations back to slightly overvalued from extremely overvalued. No, bear markets take valuations back to extremely undervalued. This process takes time. Most bear markets last roughly 1/3 the time of the preceding bull market. The bull lasted from 74-2000. This bear should last at least 10 years. Longer, if the powers that be fight it. What have the powers that be been doing? Fighting the bear, of course.
Japan fought their bear market tooth and nail and have now drawn it out 18 years. The Fed so far is following the same course. They refuse to let the financial system cleanse, just like Japan. They already bailed out Bear Stearns, and I have no doubt there will be more bail outs in the months ahead. They've lowered rates drastically, just like Japan, in the process letting inflation out of the bag. Once the inflation genie is out it becomes very hard to put him back in. It requires the willingness to raise rates aggressively in the face of a failing economy. Volker had the courage to do that and earned us the right to a 26-year bull market. Bernanke, sadly to say, is not Volker. Bernanke can't even figure out that a declining dollar hurts Americans. Incredibly enough, he actually said when questioned by Ron Paul that since Americans purchase goods in dollars, a falling dollar doesn't affect Americans. By that statement alone one has to conclude that Bernanke is either an idiot or just flat out lying. I suspect it's the latter. If gas goes from $1 to $4, how does that not affect Americans? If milk goes from $1 to $4, how does that not affect Americans? You get the point.
Bear markets are tricky critters. The rallies are very sharp, much bigger than bull markets. Since humans are controlled by emotions, we see these sharp rallies as a sign that everything is OK. Logically, we should realize that bull markets don't operate that way. In bull markets gains are made slowly as the market creeps higher and corrections are steep and scary. In bear markets everyone is convinced that the bull isn't dead, and we focus on trying to pick the bottom of the correction. The problem is that these aren't corrections. These are legs down in a bear market. I see it right now in the housing market. I can't tell you how
many people have asked me if I think it's a good time to buy real estate since the prices have come down so much. People are just doing what people do. They look at the past and project it into the future. They assume that since housing went in one direction (up) for years that this is just a correction. Folks, I'm sorry to say this is not a correction. It is a bear market. Now what do bear markets do? That's right: they take valuations to extreme lows. The housing market still has many years of declines in front of it, yet. This market won't bottom until: 1. Everyone thinks housing is the worst investment you could possibly make and 2.
We see a bunch of the home builders go bankrupt.
When the Japanese real estate market cracked, it didn't stop declining until it had lost 50% of its value from the highs. Let me remind you that Japan is an island. They aren't making any more island. Japan also has strict laws on how much land can be developed. Now if prices can fall 50% in Japan with its limited resource of available land do you really think that prices aren't going to fall at least that much here in the US where we have plenty of available land? I guarantee you they will, and I suspect they will probably decline even more than that.
Investors are doing the same thing in the financial sector. All I hear in the media is an ongoing debate whether now is a good time to buy financials. The consensus appears to be if it's not the bottom, it's getting very close. I have to ask: How can this be anywhere close to a bottom? We have another wave of foreclosures coming this year and next as more ARMS reset. Mergers have ground to a halt. What, pray tell, is going to be the catalyst for a complete turn around in the financial sector? Without the housing and credit bubbles to support outlandish profits, how are the banks going to grow earnings? If they aren't going to be growing profits then what is the compulsion to buy a business that is shrinking? I can tell you from personal experience that I've never really been interested in buying a failing business. I've never even been interested in buying a struggling business, to tell the truth. Since the financials make up such a big part of the S&P I don't see how the market is going to sustain any serious rally without them. The cold hard fact is that the financials are in a bear market. Now what do bear markets do? That's right they go down to extreme undervaluation. The bear in financials is only a little over a year old. I can say without hesitation that this bear is far from over. As long as the Fed refuses to let the bear do its work then this is going to draw out much longer than need be. We need to see bankruptcies in the financial sector and we need to see the Fed allow the bankruptcies. Then and only then can we start looking for a true bottom.
OK let's take a look at the stock market starting with some longer term charts.
A few important points to take note of. First, notice that the market made a slightly lower low in Oct 02 than the July 02 low. That was a typical bottoming sign. As the market broke to new lows the majority of investors began to panic as they were expecting another leg down. At this point the market was extremely washed out and had already declined for almost 2 ½ years. The smart money was buying from the panicking retail investor at this point. If the big money is buying then the market is probably going to go up. This also coincided with the then-due 4 year cycle low. Now fast forward to Oct. 07. The exact same pattern played out only in reverse. The market made a slightly higher high. The opposite happened as the smart money sold out to the retail investor. The
little guy was expecting the market to just continue up, up and away (so was Cramer as I recall). It doesn't matter how smart you are, emotions are stronger, and Cramer is a pretty sharp cookie. I pointed out in Sept that a big chunk of the smart money had fled this market the week after the first rate cut when the COT report showed a drop of almost 30 billion in long contracts. That turned out to be prophetic, don't you think? The rats were abandoning a sinking ship.
Now we've had a rally back up to the 75-week moving average that has failed. Again typical bear market behavior. But this time things are most likely going to get worse, and here's why. Remember I said that the bear should last 1/3 the time of the preceding bull? Remember I also said that is unless the Fed tries to fight the bear? Let me show you what the Fed has been doing since the market started its initial bear leg.
As you can plainly see, the Fed is flooding the market with freshly printed dollars. Is it any wonder that the market rallied? The problem comes in two forms. First, the market wasn't allowed to drop to attractive valuations. The bears work was halted. As I told subscribers, I think the Fed engineered a bottom in Mar. If the market doesn't become cheap can you blame the big money for not wanting to buy? As I've pointed out to subscribers all during this rally, Lowry's buying pressure has continued to drop as the market rallied. Never in the 50+ year history of Lowry's has a bull market started with buying pressure at new lows 5 months into a rally. The obvious conclusion is that this isn't a new bull market. It is, in fact, a bear market rally. A rally born out of massive monetary stimulus.
Now let me show you the other problem.
More devaluation of the dollar. Less purchasing power for Americans. But hey, according to Bernanke as long as Americans buy goods in America it makes no difference if the dollar is devalued.
Let's test that theory, shall we?
Those are the charts of oil and gas. Does it look like to you that Americans are unaffected by Bernanke's debasement of our
currency? Pretty much every other commodity looks the same by the way. Now the powers that be are going to try and hide this fact especially in an election year. As a matter of fact, they've already started. The popular talk is that speculation in the futures markets is the cause of high oil prices or it's the evil oil companies. Well sure speculation is part of the problem, no doubt about it, but who was it that supplied all that money in the first place? Did the Fed really think that the extra 300 billion they threw at the market was going to stay in the equities market? Obviously by looking at any chart of almost any commodity it didn't. So the bottom line is that the Fed has now unleashed the inflation genie in its attempt to stop the bloodletting in the real estate and financial sectors and to halt the burgeoning recession.
Oh, and don't forget the government is now adding to the problem with the stimulus checks. The only thing that these are going to
stimulate is energy prices. If you can barely afford to fill your car does anyone really think this money is not going to end up in the gas tank? What happens when you have too little supply and too much demand? That's right, prices rise. Has anyone been watching gasoline prices over the last month as the stimulus checks have hit the market? I have, and guess what? I've noticed gas prices are rising. As a matter of fact, they are rising rapidly. Hmm... supply and demand in action I would say. Too many dollars too little gasoline. Despite what the government wants you to believe, this is not free money. You are already paying the price of this something-for-nothing strategy. Here's what's even worse. I guarantee the government is going to try again with another round of stimulus checks since the first didn't have the desired effect. Like the average person the government isn't able to learn after its first mistake either.
Oh well, when has the government ever learned from it's mistakes? Heck, when we finally figured out that there actually were no weapons of mass destruction in Iraq, and there really was no need to continue a costly war what did we do? We got the hell out of there and cut the huge drain on the government budget. Yeah right. No, we intensified our efforts and poured more money into escalating the war. Does anyone really think we are in Iraq for anything other than oil? Does anyone other than the government think it would have been a lot cheaper to just buy the oil instead of fighting a war to steal it?
I suspect that many think the market is rolling over because of high oil prices. I'll grant that is the catalyst but not the total
underlying cause. The fundamental problem is that the bear market that started in 2000 hasn't finished its job of taking the market back down to extreme undervaluation. Since I'm a firm believer in the principle that you can't get something for nothing, I don't think for a minute that the Fed can just print its way to prosperity. This course has now led to soaring commodity prices and a recession as expected. I'm sure many remember the repeated debate on the SMT over the final outcome of rate cuts and massive monetary inflation. I think it's safe to say that I was right about these tactics not having the same outcome in a secular commodity bull market as they did in a long term bear market for commodities. Inflation spiked just like I said it would, and we are now in a recession just like I said happens every time energy spikes 100% or more within a short period of time.
I've repeatedly heard the usual comments of how the market was discounting good times ahead as the market rallied off the Mar.
lows. Again I'll say that I think this statement has got to be one of the most ridiculous "truths" that investors buy into. The only thing the market discounts is that the Fed is throwing money at it. I don't care how many times Wall Street repeats this nonsense, it's not going to make it true. Just because you throw in all the investors in the world it doesn't mean for one second that this collective mind can see the future any better than you or I. Did the collective mind spot the top of the housing
bubble in 06? Did it spot the top of the tech bubble in 2000? Did it spot the bottom of the bear market as the market rallied strongly out of the 911 decline? The only thing the collective mind spots is a lot of money coming its way.
OK, let's look at a few charts and see if we can determine what's going on in the market.
First off the NDX as represented by the Quad Q's is in better shape than the rest of the market. It's not going to last, in my
opinion. In all three charts the 50 DMA is below the 200 DMA and both averages are declining on the S&P and Dow charts. I said back in Dec. that the tech sector was not going to resist the decline and would end up getting hit harder than the rest of the market. At the time the general consensus was that tech was safe from the subprime debacle. The market was wrong and
tech did succumb to the bear, and it did fall further than the general market. General consensus going to be wrong again, in my opinion. As usual investors are unable to learn from their first mistake. This is much more than a subprime problem. This is now a spiking inflation problem along with collapsing bubbles in real estate and credit. Thanks to the Fed, now everyone is involved, not just banks and home owners.
I've pointed out to subscribers that we have a cycle low due in either late June or early July. I suspect it's going to be in
July just like it was in 2002. I think we are seeing the half trading cycle low and subsequent rally right now as we move into options expiration next week. I pointed out to subscribers recently that bearish sentiment was becoming too extreme. This almost always spawns a short term rally. It now appears this time is not going to be an exception. A short term rally should work off some of the oversold conditions and bearish sentiment. We should then roll over into the final move down before earnings season starts.
If we roll over hard enough and push sentiment to deep extremes similar to March, we could conceivably give birth to another multi-month rally in the market. At this point the sentiment is bearish, but not close to the levels seen in March, so there is room for more downside.
Look at the following charts of the put call ratios and you will see what I mean.
While both have moved up towards the top of the range, neither are in true panic territory yet. So while I think we are in for a
bounce, I also don't think this decline is finished just yet.
While we're at it, lets examine the bullish percentage chart for the S&P.
Bullish % has again dropped below 50%. Does this seem like new bull market action to you? During the entire bull run from 02 to 07, the bullish % rarely dropped below 50% and when it did it didn't stay there long. If this is a new bull market why are stocks having trouble staying in uptrends?
How about the % of stocks above their 200 DMA.
We see the same picture. After a brief rise above 50 the percentage of stocks holding above their 200 day moving average has again
fallen back into the 30s. At the moment only 38% of the stocks on the S&P are trading above their 200 day moving average. I haven't checked, but I suspect most of those are energy stocks.
Speaking of energy, the current thought seems to be that energy along with tech is the safe haven to hide out in. The market also seems to believe that when oil breaks, the market will rocket higher. First off, energy isn't going to be any safer than anything else. A recession is a recession and it's going to affect energy demand just like everything else. I fully expect the energy sector to succumb to the bite of the bear just like everything else. Right now I'm keeping close tabs on the coal stocks. When these break then the energy sector will be ready to follow the rest of the market lower. Most of the energy stocks are already diverging from the price of oil.
While we're at it, let's take a look at the point and figure charts. I like the point and figure charts because they eliminate
all the daily noise.
Both the industrials and the transports are now in downtrends. Remember that Dow Theory sell signal a few months ago? Many have
assumed that since the transports have rallied that the sell signal has been negated. I can tell you that in true Dow Theory, the only way that signal is negated is if "both" the industrials and the transports rally back to new highs. The industrials didn't confirm the transports. A nonconfirmation is a warning that something is wrong. It's not an all-clear signal. I'd say that something is wrong wouldn't you?
As a matter of fact, a Dow Theory sell signal isn't a signal to sell the stock market. A Dow Theory sell signal is a sign of a
deteriorating business climate. Does that sound like what we are now experiencing? Usually the stock market will follow the failing business environment down.
Let's look at the rest of the market.
The S&P, NYSE and Russell are also now in downtrends. So far, the only holdouts are the Wilshire and the Nasdaq.
Both have bounced off the up trend line. Now let me ask how many think the Nasdaq is going to pull the rest of the market higher? How many think that the overall market weakness is going to drag the speculative Nasdaq down eventually? I'm pretty sure the correct answer is going to be the second one.
I said the other day that I thought the Q's would probably close back above support and draw the TA crowd back onto the long side. On Friday the Q's did just that.
Notice in the chart that same pattern of slightly higher highs that we saw at the Oct. top. If we're lucky enough to get a gap up
open on Monday, I will add to my short position in the quad Qs, as I think they are making their final test of the 200 DMA.
As long time subscribers know I've been watching copper. Copper is an excellent "tell" on the global economy. It's used in everything. If the global economy is strong then copper prices should be firm. However, copper looks to be in the process of rolling over, despite the Fed's inflationary monetary policies.
If copper plunges below the 200 DMA then I would have to think that the emerging markets, especially the Bric countries, are following the US into recession. Personally, I don't see how the rest of the world could resist the negative effect of a
severe US recession.
Now, I think I should talk a bit about the precious metals. First off, let me emphasize again that the Fed really has no choice but to inflate the money supply. Consider that we are fighting two wars with no real way to pay for them other than monetary inflation. Consider that Social Security is basically bankrupt and the baby boomers are starting to retire in mass. The only two choices the government has is to either deny benefits that have been paid into for years or inflate the money supply. I suspect it is going to be a combination of both. First off, I think means testing is a forgone conclusion. I also think the retirement age is going to be raised.
Next, consider Medicare. The debt here dwarfs social security. Remember all those baby boomers? How many of those boomers have taken care of their health? Since more than half the country is now overweight, I'd say not many. We have lived the good life for too long and we've become a complacent society. Just look at all the advertisements for weight loss products. Americans want to take a pill to lose weight. What ever happened to the good ole fashion way of just eating right and exercising? The boomers are
fixing to put an even bigger strain on the medical system as they age. The only two ways to pay for Medicare is either denial or monetary inflation. Which do you think the government is going to choose?
I think I've made my point: the government has no choice but to inflate. When supply outweighs demand, what happens? That's
right: prices rise. If there are too many dollars floating around and not much gold, what do you think is going to happen?
That being said, we just saw a spectacular rise in precious metals price. Price moved into a parabolic spike. What happens when prices turn parabolic? They collapse, of course. Parabolic runs cannot be maintained no matter what the fundamentals say (think oil here).
Here is a long term chart of gold with the 75 week moving average. This average has contained all declines so far during this bull.
As you can see after the last parabolic spike in 06, gold traded sideways for a year to let the average catch up to price. The recent spike was born from the Feds attempt to print its way to prosperity as we moved out of the Aug. 07 lows. Gold was just responding to the laws of supply and demand. At the moment gold is still too far above the average, but the Fed is no way going to drain liquidity from the markets in this environment. Don't forget, we're talking about Bernanke here, not Volker. So gold isn't
likely to collapse anytime soon but it probably isn't likely to start the next upleg real soon either. Gold needs to trade sideways for a while and let the average catch up to price. We'll just keep watching the COT for signs that the commercials are becoming big buyers of gold, or should I say when the commercials don't feel like shorting gold heavily anymore? It is entirely possible that the powers that be could manipulate the price of gold lower as it is a small market, and it would make their phony inflation numbers look better. If that does happen to occur I will be backing up the truck and selling the farm to buy gold if it approaches the 75 week moving average. Other than that, I will just continue to hold my core position and wait for the precious
metals market to work off the excesses from the last leg up.
Now let's take a look at the energy market. First off, let's look at a long term oil chart.
I've noted before that the size of a rally is often proportionate to the preceding consolidation. Back in late 05, I started predicting we would see a major correction in the commodity markets. All bull markets tend to have these major cleansings around
the fifth year. The crash of 87 was just such a cleansing. Apparently, it takes about 5 years for sentiment to reach extreme levels. If the bull is to continue ,that sentiment has to be reset. Remember at this time the Fed was looking for an excuse to halt the rate hiking cycle. Also remember Goldman reweighted gasoline in their commodity index, prompting massive selling as funds that have to mimic that index were forced to sell. The final outcome was a correction in the commodity markets far beyond what was called for by fundamentals. Is it any wonder that we are now seeing the energy markets overshoot on the upside.
As many subscribers know, one of the patterns that I do watch is the T1 pattern. The rules of a T1 move are as follows: "A move followed by a sideways range often precedes another move of almost equal extent in the same direction as the original move. Generally, when the second move from the sideways range has run its course, a counter move approaching the sideways range may be expected."
So far, the move out of the 06 lows is following the T1 pattern perfectly. The oil market rallied from $50 to $100 giving us the required 100% spike in less than a year and the resulting recession. Oil then consolidated for a couple of months between $85 and $100. Once oil broke out, it has quickly surged to the $140 (almost) level. The first leg up managed a $50 increase. The second
leg up if you calculate from the breakout is now at $40. Everyone seems to think oil is going to make it too $150. If there's anything I've learned over the years, it's that when everyone is thinking the same thing then no one is thinking. It's possible that oil goes to $150. If war were to breakout in the Middle East, it would probably go much higher. But let me point out what no one is noticing. From the bottom of the consolidation at roughly $90 to $140 is $50. This matches the first upleg of the T1 move. It is now possible that oil has completed the second leg of the T1 move. If it has, we should soon see a collapse of the parabolic price structure and oil should test the consolidation zone between $85 & $100. If it does, I'm going to tell you exactly what's going to happen. Investors are going to try and pick the bottom all the way down just like they always do. I'll tell you what else is going to happen. Once the cycle low is in, everyone is going to want to pile back into oil. Go back up and look at the chart of gold after the parabola collapsed in 06. It took more than a year to work off that optimism. The same thing is going to happen for oil stocks. They are going to have to go nowhere for many months before they will be ready to move to new highs again. Don't forget this drop in oil is going to be a result of demand destruction brought on by recession. Recessions don't turn around quickly, so don't expect energy demand to bounce back quickly. Also, don't expect to see the end of the bull market in energy, yet. Too many people are now trying to label oil as a bubble. Let me remind everyone that bubbles form when everyone thinks that there has been a paradigm shift. Bubbles form when supply overwhelms demand but prices continue to rise. For the bull market to be over in the energy sector, we need to see massive supply come on line. The last commodity boom ended when North Sea oil came online. We haven't seen a giant oil field come into production, yet. We haven't seen huge amounts of alternative energy come online yet. Hell, we haven't even seen gas lines yet. The recent spike in energy prices was just that a speculative spike as the second phase of the commodity bull market gets underway. At some point down the road, we will enter the third phase and then we will see a true bubble in commodity prices.
As I've said many times before, liquidity will flow into undervalued sectors. As we come out of the cycle low I expect liquidity to find a new sector. At the moment, I think that sector will be emerging markets, specifically China, as they have been hit the hardest during the recent downturn. It remains to be seen where the hot money will move next, but that is my current best guess. As subscribers know, I think China is destined to be the world super power of the 21st century. China is now in the process of converting from a second rate agricultural society to an economic super power. China, in my opinion, is at a similar stage in history as the US at the turn of the 20th century. In China when someone gets a job, he doesn't ask how many vacation days he gets, like Americans. He asks how many hours he can work. The Chinese are just now getting a taste of what we westerners have had for decades. They are willing to work hard to better their lives. This kind of attitude will take the Chinese economy much higher in the years and decades to come. I have no doubt that the Chinese stock market will follow.
Now I want to say something about the COT. First off take a look at a 5 minute chart of the Dow for Friday.
What we have is a market rolling over until the last 30 minutes of trading. Does any one know what happens in the last thirty minutes on Friday afternoon? Subscribers surely do. That's right: the COT report is released. The market exploded higher only minutes after the report was released. I've been a firm believer in the COT reports for many years, but I also know that when something becomes too mainstream the market will discount it, and it will become ineffective. When I started watching the COT reports almost no one knew about them. Now it's pretty common knowledge. I even hear the talking heads on TV citing the latest COT data from time to time.
I'm going to keep an open mind on how I use the COT's. I'm not ready to give up on them entirely but I also realize that what
the commercials are doing on Tuesday (the day the COT data is collected) and what they are doing the rest of the week may be two different things. I'm also not going to rule out the possibility that the commercials may use the reports to influence market direction to their benefit. That benefit may be in the exact opposite direction of what the reports are telling us. Example: if the commercials wanted to unload positions and thought they could move the market higher by buying S&P futures on Tuesday, they could temporarily rally the market allowing themselves an attractive exit as everyone tried to follow what they thought was commercial buying. So for now I'm just going to keep an eye on what's going on in the futures markets.