My apologies for this post for some reason Wordpress is having a meltdown as far as formatting, my team is on it. Hello from Singapore, Singapore the city state, country “Island” with the cleanest streets on the planet.

So as I touched down from Hong Kong I could have been landing on Mars for how long I had been flying but it wasn’t so bad I guess. Anyway as I approached customs there were the usual warnings about bombs and weapons, drugs and gum….GUM? As in chewing gum.

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In case you have never visited Asia from the US let me assure you it is a long flight.  No need to adjust your watch if your from NYC, just go from am to pm and you’re all set.  I have to say that even as a fairly seasoned traveller when I woke up after 6 hours of sleep on the plane and saw I had 8 hours left to Hong Kong….  

Well OK I admit it was very nice, but even so  I was still a little stir crazy.  I needed a snack and I got a nice hot bowl of noodles and duck.   After my fifth movie, 2 chapters of a good book, and sleep I still had 5 hours left, ugh!  It reminded me of being a kid on a long car trip with my dad…I wanted to go up to the cockpit and knock on the door and say “Are we there yet?”    First of all let me just say…Business Class to Singapore is far more comfortable than a ride in a Buick to the Wisconsin Dells!  

Secondly…If I had knocked on the cockpit door nowadays I’m sure you would be reading about me being caned and jailed in Singapore.  OK truth, I was born in 1967 and that is not our Buick, actually my dad drove Olds Tornadoes and Cadillac’s, I just like the picture.  OK well more to report from Singapore, if I ever get there.  Check Back for more on Plantation Asia.

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Well as I wake up this morning I am greeted with a voicemail message, not good I think.  ”Mr. Kerr this is Anthony at RCG…(UH OH) You sold your June gold at 925 on a stop, have a nice day!”  Morning sunshine!  It’s always nice to wake up to losing several thousand dollars…lol  Losses are a part of trading and I always tell people this, granted they are not a fun part but truly necessary.  

Ok now bear with me while I get a bit philosophical on you.  How we handle losses is as important as how we handle winners.  It is important to keep everything in perspective.  Now this account I have the gold in was a small account and over the past 3 months I have taken a good deal of money out of it…In dribs and drabs here and there.  Certainly more than I have now lost.  So in actuality this correction and subsequent loss is not as dramatic as it could have been.  And I am going to need the write off anyway.  See the glass can be half empty or half full, it’s up to you.  

The most important thing is never to let a loss break you down or blow you out.  In other words let your account go debit or some other nightmare.  Don’t be that guy that we hear about on TV.  Set your limit and then take the loss.  Trust me it will clear the decks and then you can proceed on. If anything in all this my worst mistake was absolutely unforgivable…I didn’t even take my own advice…

Here  I am last week saying that commodities are ripe for a correction and yet I held onto some gold…  You see sometimes you can give good advice that you just can’t heed yourself…i.e Governor Elliot Spitzer comes to mind.

Anyway, if you haven’t already be sure to check out my clips on Kudlow & CO. and CNBC’s Squawk Box last week and Monday where I say we are headed for a big correction.  Now let’s look at why commodities are really pulling back so sharply…

Basically what we have is a global margin call a wave of liquidation.  Is it really that anyone believes the Fed is about to start supporting the dollar?  It seems like wishful thinking at the very least.   Heavy job losses, mounting inflation, and constant interest rate cuts to appease Wall Street have put us here and now we have to take it.  

Hot money is getting sucked out of commodities as well it should.  Many of them moved too far too fast.  Gold, oil, the grains markets all had become un-tradeable, as they basically became detached from any sort of market fundamentals.  Now with these dramatic pullbacks we will see certain commodities return to very attractive buying levels and the grain markets are the first ones on my radar.  Precious metals and oil will take longer to recover and soft commodities, well they are on a case by case basis.

The most important thing to understand is this is a correction, albeit a dramatic one and a reminder of how volatile these markets can be.   However, it is in times like these when we get necessary yet knee jerk type reactions, that we really take a long look at the landscape and see what has been oversold and why?

Again, if this selling is merely on fund liquidation and profit taking then so be it.  Maybe that means that down here some of the commodities got thrown out like the baby in the bath water and may well be a bargain that on the next move higher.  You may have to act fast because we may not see the chance for again.   Again grains seem to be the best bet.  More on this from Singapore while I am there all next week. 

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Panic is never good.  Life in NY can be rough (If you can make it here) you know the song. Is this guy running away from falling Cranes or falling brokers? Hard to say, maybe it’s both. I would look for falling office equipment over there too as most of the workers are screwed.$2 a share…I would be pissed too.   I mean my coffee and bagel this morning cost $8 so basically I could own 4 shares of BS.   Yes absolutely that is B.S., all we saw was a modern day run on the bank.  I don’t think it’s over yet either.   Meanwhile over in TV Land.  Make me “Mad Money”…. More like Irate…. if you owned Bear Stearns stock and watch Jim Cramer last week.    I hope he is watching his back out there in Englewood cliffs as a sniper may be in the trees around the CNBC campus.  People lost millions, billions… and he told them no to be stupid and sell when it was at $65 a week ago.. As someone who does a lot of TV I know that the age of You Tube and the DVR make anything you say on TV a public record, basically forever.  I am very proud of most of my predictions.  In fact I called for commodities to back off here, I mean you don’t have to be Sherlock Holmes to figure out a correction was overdue, but it will also be short lived so bargain hunt now.  Anyway here I am on Kudlow talking about the coming commodities correction. Segment #1  http://www.cnbc.com/id/15840232?video=684970418  Segment#2  http://www.cnbc.com/id/15840232?video=684968409  Segment #3  http://www.cnbc.com/id/15840232?video=685020572   And here I am on CNBC talking about an oil pullback before the market opened, when it did open it fell about $5.  Go figure.  http://www.cnbc.com/id/15840232?video=687289924     Now I have also made some bad calls on TV.. like Evergreen Solar and a couple of uranium stocks a few years ago but nothing completely absurd, and I always take responsibility for it when a call goes wrong. Now Jim Cramer on CNBC made the mother of all bad calls recently and then was on TV the next week as if nothing happened. The 5 Minute Forecast (from Agora Financial pointed this out in their issue yesterday.    

The 5 Min. Forecast

P.S. We’ve heard (and made) some bad calls in our time, but this is certainly one of the worst.

Jim Cramer on Mad Money last Wednesday: “Don’t move your money from Bear… that’s just being silly” Ouch.

 http://www.redlasso.com/ClipPlayer.aspx?id=ae47b67d-2523-4946-a2ad-aadc68176f67 

To be so wrong and still say it with such conviction to millions and then not acknowledge your mistake…Humility is the most important trait of a trader… that is what Jim is after all, isn’t it?

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Gold’s History for 30 years.  Remember we are only abut half way to the adjusted for inflation price.  Having said that, demand and supply have little to do with the gold price rising above $1000 over the last month and it is much more to do with the dollar crumbling under the weight of the Fed’s heavy hand, eroding consumer confidence, inflation, and loss of prestige for the dollar around the globe.  My target for gold now is about $1250 if the dollar keeps falling.  Physical demand however is already waining as prices for jewelry and manufacturing are skyrocketing, we simply cannot discount the fact that a major correction for gold may come should these markets ever return to actually looking at supply and demand.

The Fed must take action to defend the dollar immediately and certainly not cut rates anymore or these prices will continue to soar unchecked.

OIl seems to be defying gravity and good common sense.  Supplies are ample around the world for present needs, there is no significant disruption or choke-point right-now at least not anymore than usual. Demand remains high globally but already we are seeing a drop in usage as prices have climbed over $109 a bbl.  Not  to mention the fact that Q2 usually sees a slowdown this time of year.  As soon as April crude goes off the board next week I expect crude will finally correct and the short term move will be to the downside…maybe dramatically.  Then will be the time to look at buying back in for the longer term.

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Caterpillar expects 2008 EPS growth of 5% to 15

By Sue Chang

Last update: 5:49 p.m. EDT March 11, 2008

Print  RSS Disable Live Quotes

SAN FRANCISCO (MarketWatch) — Caterpillar Inc. (CAT:

72.61, +3.89, +5.7%) is estimating its earnings per share in 2008 to grow 5% to 15% with sales also forecast to rise at a similar pace, the company said late Tuesday, citing a presentation given by Chief Executive Jim Owens. The Las Vegas-based company expects sales and revenue to approach $60 billion by 2010 with profit per share growth in 15%-20% range starting from 2005 to 2012. Furthermore, to capitalize on various growth opportunities, Caterpillar plans to invest $2.3 billion in capital expenditure in 2008.

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    I think the above list speaks volumes more than I could say, but just in case… The problem with rising food costs are that there is little alternative for consumers.  Agricultural commodities across the board are being hit and globally demand is rising. If the insane approach of converting food supply to energy keeps going this disaster will spiral out of control.   See my comments on Fox Business in January on food inflation here

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 Group hug in South America….

The 1  hour war I was at the Newscorp building most of Friday afternoon, in NYC.  I was shuffled from one studio to the next and as I was I watched as we went from shots being fired over the border of Columbia and Venezuela to an hour later a group hug between Chavez and other leaders.  The “war” is over. 

 I think what happened was that Chavez realizes Columbia has an army that would clobber him and with the happy backing of the US, and all the multinational companies he screwed when he nationalized the oil industry.  So rather than take a chance at Columbian tanks rolling on through to Caracas, and along the way taking back oil facilities….He thought about it and decided on hugs not drugs.  And whatever drugs he is on they must be powerful. Anyway, the good news is that what goes up eventually comes down, and oil is not immune to that equation. With oil at $106 and yet plenty of immediate supply on the market something has to give, at least short term.  Remember, $15-$20 of the oil price is speculative and that money swings either way…There is no doubt oil prices are going higher..and higher…and higher….LONG TERM. 

 That isn’t to say the downside will not provide opportunity too. Q2 is typically a period of time when we see slower demand for crude oil year after year and also it is a time when refineries shut down for seasonal maintenance.  Look for a temporary pullback in crude at least until May…  When the pullback comes it could be swift but is not likely to go much below $85 or certainly $80 which is the new”floor” set by our “friends” at OPEC.   With friends like that who needs enemies. Anyway, Terry Keenan was filling in for Neil yesterday who I hope is safely on his way to Florida for vacation.    

Have a group hug with Hugo!         

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So commodities finally gave us a breather yesterday, thank God.  My phone was ringing off the hook yesterday!   “Is this a meltdown? Is it time to go short? Is the bubble bursting…?  ”  Ah, no!  What is really happening is opportunity is knocking.   Here is part of what I wrote yesterday at MarketWatch.com.  To read the full article please subscribe.From MarketWatch.com

MARKETWATCH GLOBAL RESOURCES TRADER

Bear necessities

Commentary: The law of trading gravity provides opportunity

By Kevin Kerr, MarketWatch

Last update: 4:46 p.m. EST March 4, 2008

Even in a cyclical bull market, such as we’re in right now in the commodities, corrections are inevitable. A sign of a healthy market is a correction that comes during overbought conditions. That’s what we got today; nothing more, nothing less.

So is it time to panic and sell everything across the board? Absolutely not! Actually, it’s quite the opposite.

No panic required

The fact is that a correction in some of the key commodities is overdue, so I am glad to see it today.

What we need to focus on now is which profits to grab and which to let ride back up — and most importantly, which commodities offer good value to establish new long positions. Now I know it can be very unnerving when a market comes unglued like this. The worst thing to do is panic or make knee jerk reactions. Resist the temptation to do so; it’s one of the big reasons the majority of people who invest in commodities lose.

First thing, take a deep breath. Second, turn off the quote screen. Third, take another deep breath.

Now take a look at which commodities sold off the most and where they are relative to their 52-week high, Orange juice stands out. You will gain a lot of insight from that exercise. I have done that and see some very good values now — one of which we will be adding today. At the same time, we don’t want to miss an opportunity to also grab some gains, so we will do that today as well.

The overall bull run for commodities is far from over. Even so, we need to take advantage of these corrections when we can. It also underscores the need to keep the portfolio rather small and to grab profits quite often.

Grabbing profits to fuel more trades

So while we don’t want to panic we also don’t want to let some of our extreme profits melt away. So today let’s grab profits on two of our open positions and then we will add one new one.

We have three trades in all today.

** Please note: Due to the closure of floor trading operations in New York, the ICE exchanges including (coffee, cocoa, sugar, cotton, dollar index, et al.) markets no longer accept stop orders or Good till Cancelled orders, effective immediately. For more information please contact the ICE exchange or speak with your broker.   <<<<<Did you read this nonsense…What a joke…ICE is destroying the soft commodity markets.  No Stops, no GTC’s, absurd. Who is running that show down there.  I guess the members have only themselves to blame, after all they voted for it. Shame really.

Meanwhile my friends over at Jurojin weekly sent this to me on gold.  Very interesting indeed.  I won’t  fall in the trap of writing of gold $1000 just yet.  Below is courtesy of Tyche Research and is not necessarily the opinion of KTI.

Jurojin Special UpdateMARCH 5, 2008 WHERE TO BUY A GOLD PULLBACK Pullbacks are a normal and necessary part of any bull market, and I like them a lot because they give us an opportunity to buy on the cheap.So gold bulls can consider it good news that Tuesday saw an ugly reversal for gold. If the yellow metal heads lower, there is plenty of support below.This chart shows common retracement and support levels for gold, using this week’s peak as a top. Where to fix the bottom is more art than science, but I’m using the November 2007 bottom, right before the recent run-up. It gives us support levels including 937, 882, and 856. On the other hand, if you measured from the August 2007 low, your support levels would be 905, 819, and 778.So when picking your entry point, you have to ask yourself: “How bullish are you?”While I think gold could retrace its steps in the short-term, I’m very bullish in the long-term. Some reasons why include

* The Federal Reserve is weakening the US dollar. The Fed seems to believe that drastically devaluing our currency is the only way for the US to get out from under its massive debt burdens (national debt, trade deficit, and credit crisis debt). The proof is in that Fed Chairman Ben Bernanke is not only cutting the benchmark interest rate but says he’ll cut it even more. That sends the dollar sliding. Since gold is priced in dollars, as the dollar slides, gold generally climbs. They’re on either end of what I call the “seesaw of pain.”

* Investor demand for gold is surging as investors try to hedge against inflation. One of the biggest funds that holds physical gold - the streetTRACKS Gold Shares ETF - now holds more gold than many central banks. And a new gold ETF is starting this year in India, where 1.1 billion people will suddenly have a new way to buy the yellow metal.

* The supply/demand crunch in gold is real and getting worse. Gold mine production fell to a 10-year-low in 2007, and was 182 metric tonnes short of demand. The rest is made up by scrap, but with investor demand kicking into high gear, prices are heating up.These are just three forces driving gold higher in the longer term. In the short-term, I believe you should use a pullback to add new positions. Depending on your own tolerance for risk, you can buy at near-term support levels or wait and see if gold goes lower to other support levels.

One more thing that could help you decide when to get in - if the March gold futures contract closes below 934.90, that is a signal that a short-term top is in, and gold could be in for a quick slide that will give plenty of traders heartburn.Good luck and good trades.

Black Bear

The Secret Order of Jurojin   www.jurojinweekly.com

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MarketWatch Trading Strategies for March

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