Signs Of A Bottom In The Equities Market

Why is it important to us commodity futures types what is going on in the equities world? I mean, after all, these past several months have seen some fairly impressive gains in virtually every commodity sector while the equities markets have all faltered and sold off into almost any and all perceived or actual strength. Okay, so perhaps I'm being a little too over-generalized here and most of us do recognize that equities markets are interrelated, however it is much more intertwined this time than in the past. The key link in the chain this time is credit. No matter what the investment vehicle is (equities, bonds, futures, forex, commodities, etc.) the major firms and hedge funds need access to capital in the form of credit in order to leverage their investments. Now you're starting to see it. With major sweeping changes in credit requirements, firms are having to sell assets to raise capital in order to de-leverage themselves out of some of their positions. This has all been talked about before, so we'll move toward discussing the end in sight here.

This article in New York Magazine written by Jim Cramer talks about the establishment of a bottom in the financial markets taking shape. At the bottom, some normalcy is restored and we can start mending fences. Perhaps this will mean a more responsible and less leveraged move will be made into commodities heading forward, maybe not. But either way, with new regulations in place, hopefully we won't have to see another historic selloff in this commodities market in order to free up capital for the hedge funds out there. Then again, here's hoping and nothing is for sure... that's for sure.