Rohrs & Company LLC : Seasonal Commodities Program

Summary

The SEASONAL COMMODITY PROGRAM trades seasonal commodity spreads using a fundamental approach. The seasonal approach to markets is designed to anticipate future price movement rather than constantly react to an endless stream of often contradictory news. It seeks to eliminate the "noise" in the marketplace. Although numerous factors affect the markets, certain conditions and events recur at annual intervals. Perhaps the most obvious is the annual cycle of weather from warm to cold and back to warm. However, the calendar also marks the passing of important events, such as the date for U.S. income taxes every April 15th. Such annual events create yearly cycles in supply and demand. Enormous supplies of grain at harvest dwindle throughout the year. Demand for heating oil typically rises as cold weather approaches but subsides as inventory is filled. Monetary liquidity may decline as taxes are paid but rise as the Federal Reserve re-circulates funds.

Investment Strategy

The Program seeks seasonal trades for which there is a clear FUNDAMENTAL reason why they should work. And that in the last 15 years have worked 12/15 and 8/10 and 4/5. Entry and exit points are based on historical parameters as guides, but also with a constant eye toward new market forces that could distort normal seasonal patters, as for example a "mad-cow outbreak" with Cattle; or Hurricanes with Grains and Oil.

Timing - while these seasonal patterns are fairly consistent from year to year, we found that because of various circumstances they don't always occur in the same time frames. Thus, it was important to devise additional technical analyses to devise the opportune entry and exit dates for the particular year.

Risk Management

Stops - Also, while early risk parameters were set based on historical trade patterns, this proved too volatile. Thus, additional proprietary, technical analyses were devised better evaluate to markets as the trades were unfolding.