Tighten your chin strap 7/31/9
Holy volatility, whether it be month end or a dollar reversal commodities were well bid today. In the last 2 days Crude gained nearly 9.5%, with prices hitting a 4 week high today. This was largely on dollar weakness and perhaps a Goldman call of $85 didn’t hurt. Natural gas was the only energy down today …we continue to advise clients to build longs expecting a move north in the next 60 days. The US dollar did a complete u-turn today as prices failed to get through the 20 day moving average. We still think we could get a rally but based on today’s movement we could be wrong. The only currency exposure we have with clients is a light position short the Pound with put options. Corn was higher again today, gaining 2% today in December. $3.50/3.70 remains our target. The December soy meal chart looks friendly…is our best performing CTA from last year back on track? Gold and silver were very impressive today, gold higher by $20 and silver by 40 plus cents. We were buyers of October $975/1025 calls for clients today in gold, and December $15/18 calls in silver. Contact us for pricing. The S&P looks heavy, we took a light position short with puts buying the 925 puts for September yesterday for some clients. Clients were advised to take their NOB spreads off today at a profit when bonds were trading at a 1’16 premium to notes. We took the October 86 cent live cattle puts off for clients at a small loss. Lean hogs look to be oversold, we started buying clients October 60 cent calls today.
Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Before trading MB Wealth recommends that you should carefully consider your financial position to determine if commodity trading is appropriate for you. All funds committed should be purely risk capital. Past performance is no guarantee of future trading results.
Tags: bonds, british pound, commodity, corn, crude oil, futures, gold, inflation, lean hogs, live cattle, natural gas, nob spread, options, S&P, silver, soybean meal, treasuries, us dollar
