History of the Screwworm in the USA

The history of the screwworm in the USA is this. The new world screwworm is a fly that infects cattle by laying its eggs in injured tissue such as tick bites, where cattle have been recently branded, scratches or cuts, or near the mouth anus, or ureter. The larva enlarges the wound where it grows and causes sufficient damage such that the cow can die. Before that happens the larva turns into a new fly and infects other cattle. The way that the screwworm was dealt with years ago was to release sterile males in sufficient numbers that few or no new screw worms are produced.

The screwworm has been present in the American Southwest since at least 1842. In 1933 a shipment of cattle from the Southwest to the Southeast of the USA contained infected animals. The outbreak was especially troublesome as it occurred during the economic difficulties of the Great Depression. The method used then for dealing with the screwworm was to release massive numbers of sterile males and to do so repeatedly until the flies were eradicated. This will be the approach if the infestation reaches the USA and is how it is being dealt with in Mexico. In addition, Ranchers need to pay close attention to their animals and deal with any infected wounds. insecticides are used on a case by case basis.

The most recent outbreak in the USA was in 1976 and ended up with $330 million in losses for ranchers. Reasonable estimates are that a similar outbreak today would cost closer to $1.9 billion in losses.

The issue for those interested in trading live cattle futures is that a major outbreak would result in significantly higher prices beef and for live cattle futures.

What Are Live Cattle Futures?

Live cattle futures are contracts for delivery of 40,000 pounds of full grown, live cattle that are ready for processing. The contracts are for future dates and specify how much the buyer will pay as of that date. Meat packers and feedlot operators commonly use these contracts to hedge their risk against price fluctuations. Speculators use these contracts hoping to profit for the same fluctuations. Under normal conditions, the pertinent variables are the cost of cattle feed and other costs of raising and processing cattle. In the case of a screwworm outbreak in the USA, the issue would be a scarcity of live cattle due to ranchers culling their herds.

How Great Is the Risk of a US Screwworm Outbreak?

While there are currently no screwworm cases in the USA, there are in Mexico where they deal with it by introducing sterile males into the population. The cases in Mexico have been progressively farther North and closer to the US border. When a case was reported in the Mexican state of Nuevo Leon only 120 miles from the US border is when live cattle futures popped up nearly 3% recently. While Mexican agricultural authorities are dealing with any outbreaks, the screwworm fly does not know any national borders and could simply keep moving North which could be a disaster for the US cattle industry and an opportunity for those interested in trading live cattle futures.

What Are Futures?

Futures are financial contracts. They are commonly used for stocks and commodities like coffee, oil and gold. They have also become a popular way to trade Bitcoin. A futures contract obligates the buyer to purchase or the seller of the contract to sell a precise quantity of the underlying asset at a price set by the futures contract on a date also set by the contract. Futures are used by those who produce purchase commodities like gold, oil, or coffee in order to hedge the risk of unexpected price fluctuations. Others buy and sell futures as speculators hoping to profit from swings in the price of the underlying asset. In the case of Bitcoin the primary reason for trading futures is speculation.

Where to Trade Bitcoin Futures

The CME group centered in Chicago is the world’s largest exchange for trading futures and options on stocks and commodities. You can also trade Bitcoin futures with the CME group. However, many crypto trading platforms like Binance also offer Bitcoin futures trading. In order to trade futures of Bitcoin on a platform like Binance you will need to create an account with them which will include a registration process and putting money in your account. Then you will select a trading pair such as Bitcoin and the US dollar. You will use the platform to set up a position which means deciding whether to buy or sell and how much. If you choose to use leverage you will decide just how much. Smart futures traders use techniques like stop loss orders to limit potential losses and take profits.

Profit Potential and Risk in Trading Bitcoin Futures

There are two keys to successful futures trading. The first is to correctly anticipate which direction the price of the underlying asset like coffee, oil, or bitcoin is likely to go. With stocks and commodities traders pay attention to supply and demand issues. With an asset like Bitcoin traders look for technical analysis cues like moving averages, letting the market itself indicate where prices will go next. The other key to success in futures trading is to competently manage risk. The fact is that when you buy or sell with a futures contract you are not obliged to hold that position until contract expiration. Traders follow their trades and when the value of their contract goes up due to an underlying price asset price change they exit their contract by purchasing to offset a sale or selling to offset a purchase. The point is to make money on a short term price fluctuation. Smart traders, when they set up a futures trade, immediately place a “stop loss” order at a price that will lock in a profit and one that will limit any loss. Thus, the trader is protected from rapid and unexpected Bitcoin price fluctuations. To the degree that a trader uses leverage this will increase their profit potential but also magnify any possible loss making stop loss orders even more important.

Practice Bitcoin Futures Trading Until Perfect

If you are going to actively trade Bitcoin futures, you will be working on a trading platform. You should use a platform that offers the option to practice trades using market data. This is called simulation trading. Good advice is that you should never risk any of you own money until you can routinely profit from your Bitcoin futures trades in simulation trading!

The Hispanic Vote and Bipartisan Support on Immigration Issues

Republican efforts to unseat President Obama came to naught in the last election. A large part of that was the large majority of Hispanics who voted Democrat. It may well be that the Republican Party has decided to realign itself on immigration issues in order to garner more Hispanic votes in coming elections. Certainly, the issue of over ten million undocumented persons within the USA is a problem that should have been dealt with much sooner. As with all such issues compromise is necessary on all fronts. If both major parties can come to agreement we may see a wholesale rewriting of immigration law. That could greatly affect the issue of investing and immigration reform as it could make some businesses cheaper to run, some more expensive, some more profitable, and some more likely to lose money. How immigration issue will affect the national budget remains to be seen but that could be central to the issue of investing and immigration reform. Picking new winners in this matter may simply be a matter of looking for companies that process data effectively.

How Fast and How Effective

The President has outlined his plan for immigration reform. It would include illegal immigrants having to register as a first step toward possible citizenship. These people would “submit biometric data” which is code for being finger printed and having your photo taken. Applicants would have to pass background checks and pay fees in order to obtain a “provisional status.” Then “provisionals” would need to wait their place in the immigration line for permanent residency followed by citizenship. Considering the large number of people likely to apply for citizenship using this or whatever process is decided upon, investing and immigration reform may point to profits for those companies that can provide services to streamline this process and make it less expensive. The fact that many business leaders are positive on this matter fits with the assumption that an immigration fix will benefit the country as a whole. Certainly making it easier for immigrants to get work permits could reduce the cost of stopping people at the border. What is a good investment in this area? Look at what economic changes might result and invest accordingly.

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How Diversification is supposed to Work

Diversification is based upon reciprocity, the law of averages, and the faith that the stock market will keep going up over time. The assumption is that when the price of oil goes up, for example, industries that use a lot of energy will have higher overhead and make less money whereas the oil, coal, and natural gas industries will make more money. So, if you practice diversification over several sectors you will protect yourself, so the assumption goes.

So, why didn’t diversification work last year? Basically it is the faith part of the equation. When investors lost confidence in the system in the face of a bear market and recession they pulled their money and the receding tide lowered all ships. Yes, big oil still had a great year but that was because of profits through the first part.

So, What’s Next with Diversification?

For the time being it is probably best to invest on a stock-by-stock basis. Until more money reenters the market and a trust level builds again some of the old rules will likely not work.

Right now everyone is trying to outguess the system as signs of recovery from the recession emerge. We see the recovery market going up and we see profit taking. Strong companies with cash will survive and, if not already bid up, are good long-term investments. Diversification may work again in a couple of years but we will need to see more stable economic picture first.

Down the Line

It is likely that as the recession rights itself that in bull and bear markets a strategy of diversification will work to a degree. The “take home lesson” from this may be that in long term investing as well as short term investing one needs to pay attention to each of ones stocks. What was a well-run company with an excellent product line one year may become second rate after a takeover and poor management. A leveraged buyout may temporarily raise a stock price and leave the company weak and non-competitive. Buy and hold works if you keep paying attention to what you are holding. A periodic review is always in order, reading those quarterly reports and what experts are saying about the near and long term prospects of any given stock.

The recession will be gone in a year or maybe less. Now during the recovery is the time to be making wise long-term investments in stocks that are selling below their long-term market value. Reassembling a sound portfolio with an eye towards diversification is not a bad thing but for now the best stocks in the strongest sectors is probably the way to go. After the recovery, when the market is back to normal look at balancing your portfolio.

There are several candlestick charting techniques that can be used to predict which way you should go to buy or sell your investments. The Doji comes to mind. If the open and close are very close together or the same, that means that the bulls and bears are at conflict and should alert the investor of a major indecision. Now, if the Gravestone Doji is formed at the open and closes at the low end of the day, occasionally it signifies the bottom of the markets. The reason it is called this is because, it looks like a gravestone. Another of the candlestick charting techniques is the long-legged Doji.

Most Japanese believe that the signal of the long-legged Doji has lost is sense of direction and to use extreme caution. Now the Bullish Engulfing Pattern is usually formed at the end of a downtrend. A white body is formed that opens lower and closes higher. This means the buying frenzy disperses the selling pressure. How does this candlestick charting technique turn potentially money eating probabilities into money-making trading profits? It’s like this, the factors of signals can be made to align elements that make optimal option trades, signals, market direction and many other factors.

A few other factors to consider are direction, magnitude, and time. In direction, you study the candlestick signals. As you figure them out, your accuracy will vastly improve your chances of making excellent choices in your investments. Now in magnitude, you will analyze a stock trade and its potential price movement. One will need to look at the speed and magnitude of the move before it can be considered be a reversing factor. Another thing to look at is the congestion levels above the reversal area. Now on to time, which is the weakest area of the candlestick charting technique, probably due to human weakness and impatience.

Time and emotion are two factors that cause investors to lose their money in at least 80% of their investments. Try not to let emotion get in the way and use the Japanese candlestick charting method to make money off your investments.

If we believe in the Peak Oil Theory, it is a must that we invest in oil and gas. The supply has peaked in the recent years; however the demand still continues to grow strongly.

Importance of Oil Products

As most of us are aware, crude oil, one of the most vital sources of energy, is being exhausted worldwide. The Mid-East is just not able to cope with the ever increasing demand of gas and oil supplies. Oil and gas are being consumed faster than they can be refilled.

The consumption of oil and gas is greater than what is produced in the same timeframe. The world produces approximately 85 million barrels of crude oil a day while the consumption is 87 million barrels each day.

Depletion of Oil and Gas

The demand and consumption of oil and gas have increased many times over, and the resources and production are depleting at a fast pace worldwide. As the resources and production decreases, demand and prices will increase drastically.

Industry analysts feel that the decline in production can be as high as 13% in the coming years. The year 2005 is considered as the global peak oil period. This would mean that we have already reached the peak of the curve and are now on a slide down. The graph below depicts the Peak oil depletion cumulative published by the Association for the Study of Peak Oil and Gas.

Peak oil depletion cumulative published by ASPO
[Association for the Study of Peak Oil and Gas]

Investing in Oil Futures

Oil prices are going to multiply in the next few years as the demand and consumption rises. The current prices would seem very low when compared to 10 years from now, assuming no new alternative energy sources became competitive.

It is expected that growing countries like China and India will increase their annual consumption by approximately 10% every year. Such enormous annual increases in consumption can be adequately met only for only a few years. As the shortage or demand increases, there will be a huge increase in prices.

Though there are strict SEC guidelines to book reserves for oil and gas operators, members of the Organization of the Petroleum Exporting Countries [OPEC] do not have any such guidelines. Hence, the claims about the oil and gas reserves by these countries cannot be verified by any external resource with proper evaluation. This being the case, there are chances that these countries have overstated their actual reserves. This issue has been widely accepted by many oil and gas experts.

Oil reserves have also started depleting. Larger and older reserves are running out of oil or are becoming exceedingly difficult to extract with oil wells getting deeper and deeper. The last notable oil discovery was at Kazakhstan which was some years ago. This shows that even discovering new resources has also become difficult, or we can say we have already discovered and exploited all possible oil reserves.

Hence, investing in the oil futures market at the current “relatively” low prices would be more profitable than many other investments.

Difference in oil types is based on the differences in chemical and physical makeup, and there are many investment options available in different kinds of oil. Although different type of oil have different prices, each type of oil tends to follow the track of the market. Globally all oil prices move in the same direction although each different type of oil moves independently. This puts the the oil futures parameters into motion, leading towards profit.

Those who are successful traders are able to profit in financial markets from a particular relationship, due to the fact that there is an analytic relationship between prices of different types of oil. It is understood that whenever the price of one type of oil rises by a certain amount, the price of other types is expected to rise at relatively the same rate. For oil futures, deviations from this create profit generators which are known as spreads.

A price difference, which is either too large or too small in comparison to its pair, constitutes potentially profitable oil futures spread. For the last two years the price difference between the Oil Company A and Oil Company B showed approximately US$6, however, by the end of 2005, the price difference was established at US$14.

You have to sell higher priced product and buy lesser priced product at the same time to learn how to invest correctly and profit from this spread in oil futures. You turn around your position again when the difference in prices is back to its regular level. This is called arbitrage — earning profits on the temporary differences in oil futures prices.

In the oil futures market risk spreading and risk reward ratios are expected to move in relation to one another. The average price difference between Brent and Dubai oil was around US$2 during the period 2002 to 2004. As with any other commodities trading, trading in oil futures with little knowledge about parameters involved can be a dangerous thing, especially without the aid of a proven commodity trading solution.

Success can hinge upon a number of issues. Understanding commodity trading charts is of the utmost importance. Especially with regard to specific commodity a person intends to trade in the market, it is desirable that he should have the knowledge about financial markets and how they function. Lastly, it is very helpful to have a proven system to evaluate the market, such as having commodity trading info optimized with candlestick signals.

Using technical analysis tools is the most-used or obvious way to support your decisions. It’s great because anyone can be a pro. Successful traders are separated from the rest by experience and training, coupled with the best strategies.