Inflation around the corner 2/18/10
A $2.50 range in oil today lifted prices back above $79/barrel. If you saw out interview on www.thestreet.com we thought a move back over $80/81 was likely if we got a close over the 40 day MA which happened today. We suggest staying long April futures as long as today’s lows hold and we will be looking to gain bullish options exposure on a mild set back next week. As for natural gas prices are moving closer to our $5 buy point in May. We will not buy at $5 for clients but we are interested in shopping longs at that level; that is about 4% below today’s close. June RBOB traded to 2.19 today; our objective was 2.15/2.20 (see this weeks commentary).The S&P is 6 points higher as of this post; again we are recommending legging into shorts at 1111 and 1125 if given the opportunity. We had to pay 77 ticks ($862.40) for the sugar mentioned yesterday; buying May 25/30 1:2 call spreads. Clients were advised to put in gtc profit orders on their May coffee; need to see a trade near $1.40 to hit objective. The path of least resistance in Treasuries remains down but the bulk of this leg is behind us. There could be more downside but we feel too risky to jump on the train at these levels. Agriculture was lower; we maintain our bullishness in corn. If forced to lighten up we suggest exiting soybeans and soy meal and to keep the faith in maize. Big fund buying in live cattle propelled prices to 10 month highs. We are anticipating a break that would take April back near 89.00; currently prices are 93.25. April gold challenged the 50 day moving average and trend line over night and held. This is bullish and this chart looks good. As we published in a specialty article this morning as long as 1100 holds stay long. Upside resistance is seen at 1135 followed by 1155. The 200 day moving average held on a closing basis in silver but we would like to see a close over the 100 day tomorrow to feel more confident on longs; that level is $16.38 on the March contract. We are advising clients to sell rallies in the Swissie to offset some of the pain in their Euro-currency longs. While we expect the Euro to eventually turn higher until it does we must play defense for clients.
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: bradbard, commodity, corn, crude oil, euro-currency, futures, gold, intervention, natural gas, silver, soybeans, spread trading, sugar, swiss franc
