Leo Haviland provides clients with original, provocative, cutting-edge fundamental supply/demand and technical research on major financial marketplaces and trends. He also offers independent consulting and risk management advice.

Haviland’s expertise is macro. He focuses on the intertwining of equity, debt, currency, and commodity arenas, including the political players, regulatory approaches, social factors, and rhetoric that affect them. In a changing and dynamic global economy, Haviland’s mission remains constant – to give timely, value-added marketplace insights and foresights.

Leo Haviland has three decades of experience in the Wall Street trading environment. He has worked for Goldman Sachs, Sempra Energy Trading, and other institutions. In his research and sales career in stock, interest rate, foreign exchange, and commodity battlefields, he has dealt with numerous and diverse financial institutions and individuals. Haviland is a graduate of the University of Chicago (Phi Beta Kappa) and the Cornell Law School.


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Chuck Berry sings in “’Round and ’Round”:
“Well, the joint started rockin’
Goin’ round and round,
Yeah, reelin’ and a rockin’,
What a crazy sound,
Well, they never stopped rockin’,
’Till the moon went down”.



Many marketplace high priests enthusiastically proclaim proverbs on price relationships. For some heralds, these adages are only guidelines; however, for others, they represent high (or very high) probabilities. Such aphorisms include the links between the United States dollar and commodities “in general”, or between the US dollar and the S+P 500 or other stock indices. For example, one widely popular chant: “weak dollar equals strong commodities”, “strong dollar equals weak commodities”. For some, the word “equals” in this formula implies “is connected to”, or “associated with”.

Observers differ, often substantially, in their choice between as well as the assessment of the supposedly relevant variables (data, evidence) and analytical time horizons. Perspectives on past, current, and future convergence and divergence (lead/lag) relationships between financial marketplaces (and factors influencing them) likewise can vary significantly.

In practice, viewpoints regarding the role of the dollar in determining commodity price levels, trends, and turning points nevertheless differ, and often a great deal. After all, other financial marketplace realms (such as interest rates and stocks), diverse economic and political theaters, and a wide range of other phenomena interrelate with both the dollar (and other currencies) and assorted members of the commodities world. So a variety of competing stories and predictions about the dollar, commodities (whether in general or in regard to individual sectors such as petroleum or base metals), and other marketplaces exist and change.

Moreover, historical review indicates that trends for commodities “in general” can intertwine in various fashions with currencies (such as the United States dollar), as well as with interest rate benchmarks (picture the US 10 year government note), and stock playgrounds (the S+P 500 and related indices of advanced nations; emerging marketplace signposts). Moreover, marketplace history, whether for a given arena or the relationship between two or more fields, is not marketplace destiny.

For further related marketplace analysis of stock, interest rate, currency, and commodity fields, see other essays such as: “Global Stock Marketplaces: Winter of Discontent” (3/5/18); “There Will Be Blood: Financial Battlefields” (2/9/18); “Busload of Faith: Financial Marketplaces” (1/15/18); “Marketplace Vehicles: Going Mobile” (12/13/17); “History on Stage: Marketplace Scenes” (8/9/17).


In any case, let’s now focus on the historical relationship between the broad real trade-weighted US dollar (“TWD”) and commodities in general over the past several years. The table below underlines that players should be on the watch for a fairly close coincidence in timing of major or other important turning points in those two wide realms. However, in the current context, they also should monitor TWD moves in relation to the critical height around 96.0. The broad real trade-weighted US dollar (“TWD”) recently fell decisively beneath crucial support around 96.2 to 96.6. The broad real TWD high during the global financial disaster was March 2009’s 96.6.


What does an investigation of the petroleum, base metals, and agricultural commodity groups since their first quarter 2016 major lows unveil? Many marketplace turns have occurred around the same time. All these commodity battlefields made important highs in first quarter 2018; so did the S+P 500 and other important advanced nation and emerging marketplace stock indices.

Yet not all commodity sectors (or members within a group) necessarily dance (make turns) together. In principle and practice, potential divergence can develop and persist within the commodity universe.

However, whereas petroleum arguably very recently threatened to exceed its 1Q18 barriers, base metals and agriculture apparently did not. Determined and sustained crude oil output restraint by OPEC and its non-OPEC allies such as Russia has helped to draw down OECD petroleum industry inventories. Fears of supply interruption (Middle East tension, including the Iran nuclear issue; Libya; Nigeria; Venezuela) exist. Numerous prophets assert the world economy will remain robust. The further weakening of the dollar since around mid-year 2017 has inspired some petroleum bulls.

The net noncommercial long position of petroleum players (see the CFTC Commitments of Traders) expanded massively since mid-2017, and this net noncommercial buying probably played an important role in rallying oil prices. It remains very large and is vulnerable to liquidation.

Prices for the oil group probably will not break above their first quarter 2018 highs by much if at all. Neither will broad commodity indices such as the broad S&P Goldman Sachs Commodity Index or the Bloomberg Commodity Index. The 1Q18 peaks in the S+P 500 and MXEF stock indices are two year diagonal bull time moves from their 1Q16 major troughs. The GSCI and BCI’s first quarter 2018 highs likewise are two year diagonal ascents from their major bottoms of 1Q16.

Yet suppose the petroleum complex does attain new highs relative to those of 1Q18. As petroleum is an important part of many widely-watched commodity signposts (especially the broad S&P Goldman Sachs Commodity Index), that may boost such broad indices to levels above first quarter resistance.

It is important whether or not the base metals crew (copper, aluminum, zinc, and others) also achieves new highs, for both base metals and oil link closely to international economic growth trends (and arguably more “immediately” than agriculture does).

Many major highs (lows) for commodities “in general” have roughly coincided with major peaks (bottoms) in the S+P 500. But not all have. The 2007-2009 global economic disaster era displayed an exception. The major high in the S+P 500 (10/11/07 at 1576) preceded the GSCI’s pinnacle (7/3/08 at 894). However, the S+P 500’s final top, 5/19/08’s 1440, bordered the July 2018 commodities summit.


Regardless of whether or not key commodity indices achieve highs above their first quarter 2018 plateau, the first quarter 2018 resistance for the S+P 500 and other advanced and emerging marketplace equity benchmarks probably will remain in place. As “There Will Be Blood: Financial Battlefields” (2/9/18) stated: “The S+P 500’s recent high, 1/26/18’s 2873, probably was a major top.”

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As the Financial World Turns- Commodity and Other Marketplace Domains (4-2-18)

US ELECTION 2016: ROLLING AND TUMBLING © Leo Haviland November 6, 2016

Muddy Waters’ blues song “Rollin’ and Tumblin’” declares:
“Well, I rolled and I tumbled, cried the whole night long
Well, I woke up this mornin’, didn’t know right from wrong”



Who will or should be the next American President? Will the Democrat camp, the Republican crew, or neither party, capture both the Senate and the House of Representatives? In the aftermath of 2016’s fevered campaign, will the apparently defeated Presidential candidate seriously complain of rigging or request recounts?

In any case, America’s Election Day 11/8/16 results probably will not repair, remedy, or resolve the nation’s severe political and other cultural divisions. In contrast to such ideological and practical splits, marketplace preachers generally agree the Presidential (especially) and Senate/House voting outcomes probably will have important price consequences for American (and related) stock and interest rate arenas as well as the United States dollar and many commodities. Yet financial wizards (as do politicians) differ in their perspectives and gospels. Thus assorted monetary apostles and their devoted partisans nevertheless heatedly debate what the near term and long run financial and other economic repercussions of US Election 2016 will be for America and around the globe.

Despite the uncertainty of US 11/8/16 political outcomes and the variety of competing viewpoints and rhetoric regarding related economic (commercial, financial) implications, why not offer an opinion regarding important price levels to watch in several key marketplaces? That price framework offers subjective guidance for monitoring, assessing, and dealing with intertwined political and economic results, trends, and risks.


The record high for the S+P 500 is 8/15/16’s 2194 (a 20pc rally from 2/11/16’s bottom at 1810 is 2172; 1/20/16 low 1812). A five percent rally over this is about 2304. The important 5/20/15 high was 2135. A five percent fall from 8/15/16’s plateau is 2084 (note 11/4/16’s close at 2085); 2082 was 12/19/15’s notable drop-off point. A 10pc retreat from the August 2016 summit gives 1975 (1992 was the 6/27/16 low; the UK held its Brexit referendum on 6/23/16), and a 20pc dive 1755. Note the price gap around 2040 (6/28/16 to 6/29/16). Support also may emerge around 1870 (8/24/15 low 1867; 9/29/15 trough 1872).

The shocking Brexit “Leave” result did not merely reflect populist gains. The S+P 500 responded with a sharp (although brief) 5.7pc breakdown (6/23/16 at 2113 to 6/27/16’s low).


“Here once the embattled farmers stood,
And fired the shot heard round the world.” Ralph Waldo Emerson’s “Concord Hymn” (1837), referring to the first shot of the American Revolutionary War


Though America’s official Thanksgiving Day arrives 11/24/16, many Americans and others will be thankful with the departure of Election Day 11/8/16.

Suppose Clinton wins the Presidency. Her campaign proposals include increasing taxation on the top-earning “haves” and a more burdensome capital gains tax regime. Suppose Trump triumphs. Most experts believe his tax and spending proposals, if enacted, will result in massive budget deficits. And whoever prevails, a substantial potential for ongoing sectarian conflict and legislative gridlock remains.

Most cultural observers would characterize Clinton’s victory as one for the “establishment” congregation. Some would deem a Trump win revolutionary (or reactionary). In any case, the widespread support for Trump and Sanders indicates that American “populist” viewpoints, whether within the so-called right wing/conservative domain or the left wing/liberal realm, probably will not lose much of their attractiveness or fervor anytime soon.

Besides, significant populist movements (whether rightist, leftist, or some other label) exist in Europe and elsewhere. Therefore populist enthusiasm probably will continue to cause some nervous days and sleepless nights for much of the international economic and political establishment (elite). Political and economic divisions, turmoil, and fears will continue to produce occasional dramas within entangled stock, interest rate, currency, and commodity (and real estate) marketplaces.

Suppose persuasive populist parties campaigning on a platform of “Change” win overall national power (or at least substantial practical influence) in one or more key countries. To what extent would such success encourage or confirm a dramatic shift in long run patterns for many marketplaces?

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US Election 2016- Rolling and Tumbling (11-6-16)