Playing the Mexican Peso

From thestreet.com 7/30/08

In traditional tortilla-making, corn or maize is cured in lime-infused water. The lime juice releases the skin of the corn from the kernel and also liberates the vitamin niacin and the amino acid tryptophan.
The cured kernels are then ground and rolled or pressed into thin cakes and cooked at a high temperature. The resulting tortilla emerges as a low-fat, low-sodium food, packing calcium, potassium and fiber.
Quietly, the corn tortilla has surpassed bagels and muffins to become the No. 2 packaged bread product here in America, second only to sliced bread. Tortillas and their byproduct tortilla chips and taco shells have quickly become a $6 billion per year industry here in the U.S.
One of the little reported byproducts from the skyrocketing grain prices was the massive weight they inflicted on the Mexican and Central American economies. In case you didn't know, corn is the mainstay of the Mexican diet. Corn tortillas are the staple of the food chain in Mexico. Corn and maize are used in various forms of tortilla production. What bread is to the American consumer, corn is to Mexican and Central American consumers. ................
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Time to Cover Integrated Oil Shorts

From thestreet.com 7/28/08


A month and a half ago, I wrote about an interesting "tell" that I was getting from the oil markets. I say market(s) because I noticed a distinct diversion that day. Oil prices had just exploded.
The prior Thursday and Friday (June 5-6), oil ran up $17 a barrel. I have been trading commodities for 22 years, and I can say I have seen many things, but never anything like that before.
So with oil trading up massively those two days, I was expecting oil companies to show some real upside on the following Monday. The "tell" for me came when the energy sector was one of the weakest during this run-up in its primary product. ....
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Be a Trader, Not a Gambler

From thestreet.com 7/23/08

I remember a trade I almost made six years ago like it was yesterday. It was winter 2002 and the weather was absolutely freezing. Gas was ripping higher and I was bullish -- I was long 100 April $7 calls in natural gas.
I remember the day the calls went a full dollar in the money. I was up a cool $1 million on the trade. I will never forget the next conversation I had. I went to sell the calls and the guy holding the bid backed off a touch. He backed off by a small amount, but enough to tick me off.
The trade was still massively profitable, but I let this guy get into my head. I thought: "Fine ... but you will be sorry, this market is going higher." It didn't. Instead of hitting the next best bid to get out, I got stubborn.
I was no longer trading, I began to hope. I was trying so hard to be right, to show this guy (whom I would probably never see again) that I was right. I left the position on............
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Iran Talks Can Help

From thestreet.com 7/21/08

Well, did you think Iran was just going to shut down its nuclear program?
I have been closely watching the Undersecretary of State William Burns and the results of his historic meeting yesterday in Geneva with the Saeed Jalili, Iran's top nuclear negotiator.
Don't get me wrong. It is definitely a step in the right direction to send a U.S. diplomat to the bargaining table with Iran. The purpose was to negotiate with the Iranians regarding their uranium enrichment program.
I think the meeting was largely symbolic, however. The U.S. sent Burns, Condoleeza Rice's undersecretary, to the meeting for a single day. And he was sent with demands that Iran has already rejected from much more influential diplomats.
However, I am very happy we sent him. I think the message Burns carried to Geneva was actually a message being sent to a place near Iran, but not on the Persian Gulf. I believe it was a message sent to Tehran, but meant for Jerusalem...........
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It's Not So Bad Out There

From thestreet.com 7/16/08

To my mind, things not as bad as everyone seems to think.
Alcoa(AA - Cramer's Take - Stockpickr) and General Electric(GE - Cramer's Take - Stockpickr) beat analysts' estimates. And Intel(INTC - Cramer's Take - Stockpickr), Altera(ALTR - Cramer's Take - Stockpickr) and Wells Fargo(WFC - Cramer's Take - Stockpickr) have posted solid quarterly performances. Plus, crude oil dropped $6.49 on Tuesday and is down more than $1 on Wednesday.
The consumer price index was up 1.1%, an improvement for the first time in more than three months.
Citigroup(C - Cramer's Take - Stockpickr) reports results on Friday. The stock has been crushed, closing at $14.50 after hitting $56 a little more than a year ago. Analysts around the Street are certainly going to shoot low; after all, any analyst who has been around for a while is surely not going to go out on a limb with overly optimistic Citi numbers. ...........
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Pawn Shop Trade Golden

From thestreet.com 7/14/08

It was almost a year ago to the day. I remember because it was just days before Major League Baseball's All-Star break. It was raining hard and the market was a bit nervous about subprime, but we had no way of knowing the Pandora's Box that would unfold in the coming months.
I had been calling the bull run in gold and was (and still am) very bullish on the metal. There was a business I had been following for a while that would be an incidental winner if gold prices stayed high and the economy weakened. I had pitched a new Bolling story for Fast Money. It was a "Dirty Trade" segment on pawn shops.
My theory was this: With a nervous economy and jittery job market, pawn shops stood to benefit. Seeing tough roads ahead, I suspected that people would pawn their gold jewelry and use the money for necessities. Pawn brokers would be the right business at the right time.
EzCorp (EZPW - Cramer's Take - Stockpickr) remains that best play on my "pawn shop" theme. It is one of the world's largest operators of pawn shops. It derives revenue from two main sources.
First, it collects interest from the loans it makes. In some states (Texas, for example, where the majority of EzPawn shops do business) the interest rate on short-term loans can go as high as 240% ... legally!
In about 25% of those loans, the customer chooses to walk away from the collateralized jewelry, electronics, musical instruments, etc. If that happens, EzPawn shops are allowed to sell those items. ....................
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Bulls & Bears 7/12/08

• True Religion Apparel Inc. (TRLG)
• EZCORP Inc. (EZPW)

Betting on the Buck

From thestreet.com 7/9/08

The moon is waxing crescent. It is 39% visible on its way to the first-quarter phase appearing on July 10. It's not until July 18 that the full moon is visible, as the sun reflects the moon's full image back to Earth.
It is said that people, animals, tides and events are affected by the lunar cycle. The notion is that these unpredictable occasions become increasingly emphatic as we approach a full moon. It is believed that crime rates increase and people's behavior becomes more erratic and agitated as we approach the full moon.
Apply that science to the markets, and we are in store for some wild trading over the next 10 days. If the wild swings and gyrations of the last two days are any indicator of the next 10, put your seat belts on and get ready for liftoffs or crash landings or more likely, both.
So what has been moving the market the last few days? Oil? Nope. Earnings? Nah. Economic data? Not really. The one indicator that has been moving just ahead of wild swing in the market is the dollar.
The dollar started out strong in Europe on Monday, and the indexes were up in early trading. The dollar started to weaken and fell sharply at around 10 a.m. Two hours later, the Dow began a rapid slide from 11,350 down to bear territory at 11,150. Then, on Tuesday, after spending the early morning resting around the unchanged level , Mr. Jamie Dimon, CEO of JPMorgan Chase (JPM - Cramer's Take - Stockpickr)), offered a bit of hope through a truly compelling speech to the FDIC forum in Arlington, Va. ............
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Brazil Knows Oil

From thestreet.com 7/7/08

Ten years ago, I was in Brazil for a commodities conference, and I had a great opportunity to meet with some petroleum producers and refiners. It was clear that Brazil was getting its act together.
The oil industry was growing, and money was being spent on exploration and development of new oil fields. I realized that the Brazilian oil industry was worth watching.
The Brazilians are very forward-looking and are willing to spend big to produce more oil. They realized then and now that the world was going to need more oil. They were willing to spend some serious real on insuring their place in the global oil picture.
On a Saturday afternoon, I had some free time and went to Ipanema beach in Rio De Janiero. It was a sandy tropical beach with beautiful people everywhere. While sitting there, a kid came up to my beach chair and began showing me how he made a souvenir with wood and leather. He was very animated, and I found him amusing so I bought the thing for a few U.S. dollars.
It wasn't until a few minutes later that I realized he had an accomplice who had reached under my beach chair and lifted my bag. I got fooled by the old "look over here" scam. I had some money and nonsense in there, nothing to get too fired up about. I chalked it up to being a gringo in a place fairly unfriendly to gringos........................
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Oil Pressures Stocks

Gold in a Pennant Race

From thestreet.com 7/2/08

Gold is breaking out of its pennant just as everyone begins to gear up for the Olympics in Beijing. As we head into the July Fourth weekend, the Olympic trials -- the competition to decide who will represent the nation in the games and go for the gold -- are heading down the homestretch.
Let me explain the logic and psychology of a reliable technical pattern -- the pennant. After a market, in this case gold, makes a big move in either direction, it starts to get volatile. Big moves up are met with big moves down.
Both bulls and bears are confident and take turns pushing the price up, then down. This goes on for days, but as time passes, the trader instinct begins to kick in ... "Why isn't this following through?"
The moves up and down become less and less exaggerated. The pattern that forms is called a pennant because the widest part of the flag is at the beginning and eventually closes in on a small point at the tip.
Pennants are great predictors of a substantial price move, but there is a catch. We don't know which direction the big move will go. The psychology again: The pent-up bulls and bears are ready to add conviction, but only one will win and we aren't sure which one. So, we wait for the "breakout." ..................................
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