A Correction is Underway 7/6/9
The story today was more sellers than buyers as most commodities traded lower. We had suggested to clients that oil looked heavy and could make its way to the 50 day moving average which happened today. For new long entries we expect the $62 level; 50% Fibonacci retracement level to hold. Our pick in the energy sector remains natural gas. October traded to a new low today at $3.72. Though we are not suggesting futures yet we continue to advise the purchase of $1 call spreads. The dollar was bid higher in the morning but gave back most of today’s gain before the close. Aggressive traders could be long the yen or Loonie at this point. See our commentary from this morning for more precise trade recommendations. The path of least resistance remains down in agriculture, we are looking for a sign of a bottom to be a buyer of December corn but sit on your hands for now. Gold and silver are buys right here…right now…in my opinion. We’re suggesting $100 call spread in October gold and $3 call spreads in December silver. All clients that have bought in recent weeks are down on the trade but agree months from now this strategy will pay off. Continue to scale into shorts in the Euro-dollar. Sugar most likely will be a buy this week but for now we’re are spectators. See our coffee and orange juice trades in our commentary. OJ was higher by 8.5% today on rumors of a tropical storm, g-d forbid we actually get some activity.
Tags: agriculture, coffee, commodity, futures, gold, natural gas, oil, options, orange juice, silver
