Wednesday, October 8, 2008

...and Bagels Still Cost a Buck

Go down to your local bagel shop and ask them why they still charge a buck for a bagel. I understood why they raised it but its about time they cut it back down. Sooner or later, customers will flock to the first guy to make the cut - and advertise it.

And don't let your service and delivery people get away with that "fuel surcharge" any more with gasoline and diesel giving back nearly all their 2007-2008 gains.

wheat chart
Check out this three year chart of wheat. This pattern should go in a textbook.

3 comments:

TradeDog said...

Michael:

This is because prices rose so quickly and business has slowed so much that price hikes will stick. Gasoline futures are at $2.02....have gas stations dropped prices that quickly? No, it takes time to go through the system. However, when things slow down, businesses look to raise capital (revenue) in any way possible. All businesses are struggling...you will not see "commodity-related" reductions. That is just not the way business works.

TradeDog said...

Great chart and example of a Head and Shoulders pattern. However, I have found that in commodities, once a pattern like this is seen on a long term chart, the decline may just about be over. Example, draw a long term trend line along the bottom and you will see that we are very close to support (Long term). I am not saying it will hold, but in many case studies, it does and this becomes a great long opportunity. Commodites seem to work (in my work) differently than equities. Commodities over extend further in either direction than equities. Something else to think about> Commodities are a necessity in the food and lifestyle chain (energy), stocks...are popular now, unpopular later and while people can become disinterested in equities, they always want bread, gasoline, orange juice, milk, corn, meat, and other natural resources. When they start trading Lobster futures? We all have something to fear.

Quick Takes Pro said...

Oh, I know that retailers are slower to lower prices than they are to raise them. But I also know I am more likely to shop price now than ever and the first store to drop them gets my business.

As for the downside target for the H/S pattern, a trendline does not describe the action in this market, at least not a long-term line. I am using support and resistance and do see plenty of downside potential on the chart.