A bull market 9/2/10
There’s always a bull market somewhere…it just so happens that it appears to be in commodities. Crude has rallied just over $3/barrel in the last 2 days and is fast approaching the 20 day MA; in October at $75.60. The bulls are back in the driver’s seat; our targets are $77.25 and then $78.60. 54 BCF injection on today’s AGA in natural gas. Our suggestion remains scaling into long in November futures and November call spreads. Our targets are $4.50, $4.75 and then $4.94. Indices broke above the 50 day MA and should test the 200 day MA in the coming sessions; perhaps tomorrow depending on the jobs #. That level in the Dow is 10,350 and in the S&P 1107. Our client’s sugar short positions are not so sweet as prices rose 1.5% today. Fortunately we just initiated their first leg in March 2011 put options and will not add to the positions until prices roll over. December 10-yr notes broke the 20 day MA today, 30-yr bonds have yet to do so; that level is 131’31. We think a major top is in the making and have advised NOB spreads and bearish options exposure in 10-yr notes. Aggressive traders may have been stopped out of their live cattle shorts as a fresh 2010 high was made in the December contract today. The seasonality in September in gold and the trend support higher prices which I will not fight by getting clients short but as we’ve cautioned in recent posts a correction could happen so tighten up stops or lighten up is our suggestion. December silver traded at a four month high today fast approaching the $20/ounce level. The recent ride has been nice but we’ve chose to lighten up for clients thinking prices have gotten ahead of themselves. We’re looking to re-establish longs on a trade back near $18.50. FC Stone revised down their corn yield to 162 from 165 and Informa will come out with revisions tomorrow. Continue to buy dips in Ag; we suggest wheat and corn. Aggressive traders could buy dips in the Euro and Loonie; with upside targets of $1.30 and .9700.
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, calls, commodities, commodity, corn, crude oil, dollar, energies, futures, gold, grains, live cattle, livestock, Loonie, matthew bradbard, MB Wealth, metals, natural gas, options, S&P, silver, stock market, sugar, treasuries, us dollar, wheat
