Are Commodities back ? 2/2/10
Crude oil has advanced almost $5 off its’ lows in the last 2 sessions trading back above $77. Ideally you are already positioned to take advantage of this and further upside. In the March contract we see $80/barrel this week if not next. On that we would tighten ups stops and start looking to lighten up on your positions. Natural gas was a gainer as well but to a lesser extent only gaining marginally. Needless to say prices have made higher highs and higher lows for the last 3 sessions and we see more. We suggest trailing stops to just below today’s low. In March on a trade to $5.75 we would exit a portion of longs. Contact us for more specifics. The April call spreads should have gained, we will have exit orders to come on further upside. Indices were higher by over 1% as of this post; still we want more upside before selling on behalf of clients. See recent posts…we suggest using 1105/1115 in the ES & SP as a sell window. We advised taking profits on all cocoa shorts today; after a 9% move lower in 9 sessions we may get a bounce. Sugar was higher but the calendar spreads (long July/short March)picked up for the second day in a row. Clients have gotten back approx. $1100 per spread and will be showing a profit on another day like today. We expect there to be another 75-100 ticks in the spread ($840-1120).OJ was higher by a nickel intra-day closing 1.50 cent higher on the day. A trade above $1.50 in May should get clients their objective on their May back ratio spreads. Agriculture is a BUY; we recommend light long exposure into Monday’s USDA. Our favorite remains corn as clients own May & July calls & December futures. Clients were advised to buy May soybeans and soy meal with stops below recent lows or to buy calls. Live cattle and lean hogs were higher today but without our clients.We are looking to re-enter but have yet to figure out the best strategy…stay tuned. Silver remained above the 100 day moving average but I’m disappointed we did not see any follow through. As long as $16 holds we like being long but on a breach it could get ugly so be careful. April gold did better but until we get a close above the trend line just above today’s highs we’re not out of the woods yet. Call spreads in both metals in my opinion seem to be the most advantageous play currently. The RBA left rates at 3.75% which surprised the market and that to me is why the Aussie got hit overnight. We established a new play in FX today for clients; long the Euro/short the Yen. Our targets in the March contract are 1.4050 and 1.0925 respectively.
Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.
Tags: corn, crude oil, euro-currency, futures, gold, lean hogs, live catlle, MB Wealth, natural gas, options, silver, soy meal, soybeans, spread trading, yen
