Energies The trend in recent weeks has been up and though we feel that it will continue we’re expecting a $3-5 set back in Crude oil in the immediate future. In the August contract we expect $79 to act as solid resistance, as for support we see $76, 74.90 and then 74.00. We should have some long trade ideas for September and October this week if prices pullback as anticipated. If our analysis is correct that should mean a 15-20 cent correction in the distillates as well. Since natural gas prices bottomed in late May prices have advanced just over 25%. These gains have erased four months of losses and caught a number of traders short. Heading into hurricane season and with temperatures remaining above normal we suggest being long but as for our clients we’re looking to buy a dip. We’re expecting prices to fill the gap from early last week and are willing to establish longs for clients on a 6-10% correction. We will likely be moving clients into August futures and September and October call spreads.

Livestock There were no surprises in last weeks Cattle on Feed report as it came in line with expectations. Over the past weeks we’ve advised clients to start scaling into longs in December live cattle via futures and options and we would continue to do so. Both the daily and weekly charts point to prices finding a bottom very soon. This is seasonally one of the best times to buy cattle; beef consumption starts to decline in hot weather, but so does supply, as feed lots are short on inventory. This supply/demand imbalance generally sets a bid under the market. Past performance is not indicative of future results. Our expectation is that December can find its way back to 96/97 in the coming months. We expect feeder cattle to continue meandering sideways and see no viable play long or short. In the past two weeks lean hogs have rallied 5% and though we do not expect that pace to be sustainable we think this run may have a little more gas. If prices were to appreciate another 3-5% we would start shopping bearish plays for clients.

Financials
Stocks: It has been awhile since we’ve seen two positive weeks in a row but now we have with indices gaining last week carrying price back above the 200 day MA. The volumes have been less than stellar and though we expect prices to gain 2.50-4.0% more we’ve started to prep clients for short opportunities in the coming sessions. The major hurdle that we expect to act as solid resistance is the 50 day MA which comes in at 1133 in the S&P and 10505 in the Dow. Our feeling is we could get a trade up to the 61.8% Fibonacci level but we do not expect any rallies to hold. That being said at the most our upside targets would be 1145 and 10560 respectively. Above 1130 we would be willing to start scaling into short futures and we also will be looking to establish bearish option plays for clients in September ES. The calendar is light this week but we do have a FOMC meeting which ought to be shrugged off as we expect no new developments.

Bonds: Treasuries traded higher last week approaching a two week high but we think this probe higher will turn into a failed rally as prices should do an about face and head lower. That being said on a stock rally and trade south in 30-yr bonds we suggest exiting your shorts. We’ve revised our downside target to 121’20 and at that level we will be exiting clients NOB spreads (short 30-yr bonds/long 10-yr notes). This is because if the indices falter in the coming weeks the Treasury complex would likely re-emerge as a flight to quality play and lift prices higher. So in review exit shorts on a trade lower this week, let the Treasury market rally and look for a short from higher levels in the coming weeks. Back off the bearish attempts in the Euro-dollar as prices are moving higher and it is more unclear to me now when the Fed will make a move on interest rates. I initially thought late this year now I’m thinking they could wait till 2011.

Currencies What a difference two weeks can make as the dollar is headed south and all other crosses have headed north. This could prove to be a real game changer. The dollar has shed 3.6% in the last two weeks dragging price back below the 31 day EMA for the first time since mid-April. On the daily chart prices are becoming oversold but we could still see another 2-3% before buyers appear. The Euro had one of its best weeks in years last week lifting prices back over the 20 day MA for the first time since mid –April. Clients were able to make a small profit playing longs but we chose to exit and move short the Loonie. As long as prices hold 1.22 we still could see 1.26 but we will be a spectator. Aggressive traders could short the Pound as we expect to see 1.4500 again before we see 1.5000. The commodity currencies have benefitted of late but we think the easy money has been made on longs and we would not recommend fresh longs in the Kiwi or Aussie until prices retrace. As for the Loonie clients are short via futures and options looking for .9550 in the coming weeks. The Swiss franc has appreciated 5% in the past two weeks and last week filled the gap that we predicted from early in May. If long tighten up stops as we feel too much too quick. The Yen broke out of the triangle formation to the upside closing back above the 20 day MA. Clients own July puts and are down on the trade; if prices do not trade significantly lower this will be a loser for clients. Worst case they could get hit for $440/per option.

Grains It has been quite a run in corn as prices in December have gained every session in the last two weeks.  Friday prices were unable to penetrate the 100 day MA or the trend line that has held since the collapse last January but we think it is just a matter of time. We will be lifting clients July short hedges this week on a setback and would advise others to gain bullish exposure on this dip via September options or December futures. We thought it may be time to exit longs in November soybeans and December soy meal but after doing a bit more homework we think it would be prudent to stay long but tighten up stops. We think on any weather problems, a jump in exports or funds finding their way back to the grain complex we could see further appreciation. In November soybeans a trade back to $9.75 is not out of the question and December soy meal could see 285/290. Wheat and oats have been affected by wet weather in Canada and could see heightened volatility as the reports vary on the exact damage. After a 40% appreciation in oats in five sessions we decided to take a flyer with some of our clients buying July $2.50 puts willing to risk the entire premium and potentially catching a retracement and netting 125%. Risking $220 per option with a profit objective of $280. We have no suggestions in wheat as we backed off the KCBOT/CBOT wheat spread that we mentioned last week. On a 15-20 cent retracement we may look for out right longs…stay tuned.

Softs Cocoa should continue to grind lower as long as the tend line we mentioned last week acts as resistance. We would be willing to lightly start buying for clients on a trade closer to 2800 as that level as served as solid support in recent months. Being October sugar prices have wandered between 14 and 16 cents for several weeks we do not expect much but we would be willing to lightly buy near 15 cents with stops just below potential playing a push to 16 cents. Those still long from months ago with October contracts would need to see a trade closer to 17 cents before I would look for an exit door. With three months time it is feasible but this is not historically the strongest seasonal time for sugar. December cotton remains on our sell list; we advise short exposure in December via futures and options being we imagine prices to be closer to 70 cents than 80 in the coming months. The move in coffee has been spectacular but sad to say we missed this one and view it as too risky to get involved at this point. We could see a move of 10 cents either way at any point ($3,750/per futures). Aggressive traders could buy dips in September or November OJ; while it is not our favorite trade many clients are interested. If forced to be long we would prefer to be long futures and sell calls against that position. Contact us for a further explanation. With horrendous housing numbers it is no wonder lumber price have collapsed 40% in the last two months. These markets are called futures for a reason though we’re not calling a bottom in the housing market examining the daily and weekly charts in lumber aggressive traders could start scaling into longs. We should have specific trading ideas this week.

Metals The yellow metal continues to shine setting another record high last week clearing the $1260 level with little problem. Clients remain long their December $75 call spreads as long as the 20 day MA and trend line both at $1225 hold. Though the long gold trade is getting crowded we do feel prices could make an attempt at $1300 in the coming sessions. Traders that trade gold recognize that gold typically takes the stairs up and the elevator down so on a trade to $1300 we would be looking for the exit door on client’s options. Those long futures continue to trail stops because one day we will get a wicked correction and you do not want to give back too much. Silver gained nearly $1 last week lifting prices to a five week high and back above $19/ounce as predicted. Clients remain long futures and September call spreads looking for slightly more but if prices fail to challenge the May highs this week we will be lightening up. We feel prices are destined for $22 this year but do not expect it to be a smooth ride. On a correction those not in yet should be willing to step up to the plate between $16.70 and $17.35. Copper continues to be a sell rallies market and the next leg lower should resume when indices roll over in the coming weeks. As most followers know we rarely trade copper but rather use it to help guide trades elsewhere.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial.  Past performance is no guarantee of future trading results.

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For August 10th– August 14th 2009

By: Matthew Bradbard

It always amazes me how short-term investors’ memories are. There is chatter of improving U.S. and world economies, which we feel is way too premature. Corporations are reporting optimistic numbers but could that be because expectations were so low? We’ve lost 2 million jobs in the last 6 months and because unemployment dropped 0.1%, which I still doubt is the case, it is supposed to be viewed as positive? Commodities are moving higher and this signals a recovery…I don’t think so. Treasuries and equities are trading in tandem as opposed to inversely, this will not last. The dollar is not being sought out as the fear trade and it actually rallied on positive economic news? As my basketball coach used to say, sometimes the best offense is a good defense.

To find out exactly how we are positioning our clients in commodity futures and options, Contact us today at 1-888-920-9997.

The DOE reported crude oil supplies were up 1.7 million barrels, supplies of gasoline were down 200,000 barrels while heating oil supplies were down 300,000 barrels. September crude oil closed up $1.63 trading to its highest level since 6/30. Expect $73/74 to act as resistance with support coming in at the 9 day moving average at $69.40. The chart looks overbought; a trade down to $66/67 is not out of the question. At this time we’re not advising getting short, but we would suggest being out of longs. September heating oil was higher by just over 8 cents last week but it too is showing signs of a top with prices ending last week 6 cents off their highs. Resistance is seen at 1.95/1.96 with support at 1.8850/1.89 followed by 1.83. September RBOB closed lower by 45 ticks as prices failed to make their way to higher ground after 3 positive weeks. Resistance is seen between 2.05 and 2.07 with support at 1.94 followed by the 20 day moving average at 1.87. 

The DOE reported underground supplies of natural gas were up 66 billion cubic feet last week to 3.089 trillion cubic feet. Supplies are now up 23% from a year ago. September natural gas closed up 4 cents which would not have been possible without the 11% move higher on Monday. Resistance comes in between 3.85 and 3.90 with support at 3.55 followed by 3.40. We continue to buy clients November $1 call spreads. The settlement on the $5/6 call on Friday was $2700.

October live cattle were lower by 1.125 last week. The 61.8% Fibonacci level at 88.20 should remain as support. Resistance is seen at 89.60 followed by 90.60. We executed a bullish option play for clients last week selling (3) October 84 cent puts and buying (1) October 90 cent call. This trade was done for even money which means the only cost was the transaction costs. Our target for now is $600 per spread.  September feeder cattle were lower by 1.075 last week. Support comes in between 100.00 and 100.40 with resistance at the 20 day moving average at 101.60. We have no outlook at this point.

October lean hog prices fell by 9 cents last week losing 17% extending a slide to the lowest price since 02’. At this point it is a challenge to find support on the charts. Resistance is seen at 52.00 followed by 54.50. We are buying December 54 cent calls for clients for approximately $800. If and when there is a recovery we expect a violent move higher.

Stocks: The S&P 500 was higher last week by 23.75 points gaining 2.4%. We’ve positioned clients short via 925 and 950 September ES puts expecting a trade down to 960 in the coming weeks. Serious resistance; looking at the weekly chart prices at their highs last week were nearing the trend line dating back to the highs in September 07’. Additionally, 1015 is the 38.2% Fibonacci retracement level from the H/L over the last 3 years. The Dow was higher by 225 points gaining 2.5% last week. Last week’s high just above 9400 should act as resistance with support at 9150 followed by 9000. We have no exposure in the Dow with clients but once again we would advise stock investors to book some profits. Weeks down the road if this ridiculous move continues, would you rather be on the sidelines wishing you were in the market, or if reality sets in and stocks head south be in the market and wishing you were on the sidelines?

Bonds:  The US Labor Department said the unemployment rate improved from 9.5% to 9.4% in July with a net loss of 247,000 jobs, a much smaller loss than expected. It was the first improvement in the unemployment rate since April of 08’. Why is it that corporations get in trouble for fudging the numbers but the US government can do that with little consequence? September 30-yr bonds were lower by 3’22 points last week trading lower 4 out of 5 sessions. Resistance is seen between 116’16 and 117’00 with support at 114’16. September 10-yr notes were lower by 2’13 points. Resistance comes in at 115’16 with support at 114’00. Euro-dollars were lower last week and if the recovery is underway the argument is that the Fed will raise rates sooner rather than later. If interest rates do go up then Euro-dollars go down, hence why we’re suggesting puts. Buying June 10’ “at the money” puts currently costs $1200, September 10’ “at the money” puts currently $1500. The FOMC meets on Tuesday and Wednesday this week. No change in rates for now but it could come sooner than most think.

The BoE met and kept its interest rate unchanged at .50%. They also said that they would increase their level of quantitative easing from 125 to 175 billion pounds. The Pound was lower by 60 ticks as we feel an interim top was formed just above 1.70 last week. Resistance is seen at 1.6875 with support first at 1.6500 followed by 1.6275. Last week clients were in and out of September 165 puts at a 40% profit, though some took partial losses on the 160 puts. While we think the trend is down we did not feel it was worth the risk of time decay to hold the puts through the weekend.

The ECB met and kept its interest rate unchanged at 1.0%. The September euro closed down 97 ticks last week, much of that coming Friday as prices reversed from higher levels closing lower by 171 ticks ending the week just below the 20 day moving average. Resistance comes in between 1.4275 and 1.4300 with support eyed at 1.4060. Prices look like they are heading to 1.3850 in the next 2/3 weeks.

The RBA met and kept interest rates unchanged at 3.0%. The Aussie was higher by 17 ticks last week even with prices lower 4 out of 5 sessions. If the US dollar moves higher and we do get a commodity correction this currency should be one of the hardest hit. That being said we advised clients to buy September 80 cent puts for just over $400 on Friday. Resistance comes in at .8425/.8450 with support at .8250 followed by the 20 day moving average at .8165. We expect a trade down to .8100 in the next 2 weeks.

The Swissie was lower by 134 ticks last week. Resistance comes in at the 20 day moving average with support at .9150. We expect a trade down to .9000 in the next 2 weeks.

The Loonie was lower by 49 ticks last week. A new high failed to attract buyers and prices closed 172 ticks off their highs. Resistance is seen at .9300 with support at the 20 day moving average at .9135 followed by .9000.

The yen traded lower by just over 3 cents last week to its lowest close since 6/16. This was the largest weekly decline since the first week of June. Resistance comes in at 1.0380 with support at 1.0150 followed by 1.0050. The inverse relationship to equities should continue. The BOJ is expected to stand pat on rates.

The Kiwi was higher by 110 ticks or 1.7% last week to trade to the highest level in 10 months. This was the fourth consecutive positive week. Last week’s high at .6805 should serve as resistance with support seen at .6625 followed by .6550.

The US dollar was higher by 95 ticks last week closing just above the 20 day moving average and at the 38.2% Fibonacci level. Support should hold at 78.40/78.50 with resistance at 79.60 followed by 80.10. We expect a bounce but have been fooled before.

USDA report out Wednesday 8/12

September corn was lower by 20 cents last week taking prices back to the levels from 2 weeks ago. We used this pullback to re-establish longs for clients but this may have been premature. The idea was to have light exposure into the USDA and then look to react depending on the numbers. We advised clients to buy December $4 calls between 12/15 cents. Support in September is seen at $3.05/3.10 with resistance at $3.35 followed by 3.55.

August soybeans were higher by 44 cents last week. Resistance is seen between $11.90/12.00 with support at $11.55/11.60. On a bullish USDA report we should see prices back over $12/bushel and on a bearish report expect a retreat back to $10.80. We still have no exposure with our clients in soybeans but for those who wish to trade we would advise the new crop (November) or trade soy meal at this point. As we stated last week one of our better performing CTA’s has a long soy meal position.

September CBOT wheat was lower by 42 ¼ cents last week trading to a new contract low taking prices below $5/bushel. We currently own December calls for clients and depending on the USDA we may look to add to this loser or a place to exit and cut their losses. Support comes in at $4.55/4.60 with resistance at $5.10. September KCBOT wheat was a loser of 34 ¾ cents last week. Support is seen at $5.00 with resistance at $5.45/5.50. The same trade opportunity exists in the KCBOT/CBOT spread this week as did last week. Look for an entry between 16-19 cents with a stop close only at 10 cents and a target of 35 cents. Last week one could have entered this spread at 16 cents and by Friday’s close we were back at 25 cents.

September cocoa was lower by $73 last week. We are holding October 2500 puts at a loss currently for clients. Resistance is seen at 2860 then 2900 with support at 2695, which is the 50% Fibonacci retracement level and the 50 day moving average.

October sugar jumped up 2.10 cents gaining 11.2% to another new contract high with ongoing talk of a shortage in India. It was the highest spot price for sugar since 81’. There is also talk of possible dry weather in Brazil. Prices have now moved higher 18 out of the last 21 days; a move we feel is unsustainable. We’re on the sidelines with clients waiting for a correction that seemingly may never come. Why this is truly frustrating is I’ve been preaching about sugar being one of the most undervalued commodities now for 4 years and I’m missing a historic move. At this point the charts do not matter.

October cotton was higher by 2.73 cents. Support is seen at the 50 day moving average at 58.25, resistance is seen at 61.00 followed by 62.50. We have no exposure into the USDA report but we are pricing out ways to get clients long with futures and options.

September orange juice gained 10.65 cents or 11.7% last week. Support is seen at 94.00 while resistance comes in at the recent high at 104.85. We are looking to buy dips most likely in the November contract.

September coffee was higher last week by 9.75 cents or 7.6% to trade to its highest level since 6/5. Now we recognize we definitely left too early. The performance of the softs in the last 3 weeks has been reminiscent of the pre-bubble days in commodities. We are trying not to get caught up in the euphoria and still institute disciplined money management and we advise you to do the same. Resistance is seen at 140.50, support between 133.50 and 134.00.

September silver was higher by 77 cents last week trading to its highest level since 6/12. We continue to gain exposure to December silver for clients via $3 call spreads. We could see a minor setback so closely monitor stocks and the dollar for outside influence. Last week’s high just above $15 should serve as resistance with support first at $14.20 followed by $13.75.

December gold was higher by $5 last week, nevertheless prices traded lower 3 out 5 sessions as this market is starting to look tired. Resistance comes in at $970/975 with support at the 50 day moving average at $947 followed by the 100 day moving average at $933. We currently own no gold for our clients and would not rule out a washout from here. Conversely we may see a trade up to $1000/ounce but it will be without our clients.

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. There are no guarantees of market outcome stated, everything stated above are our opinions.

For August 3rd– August 7th 2009

By: Matthew Bradbard

Even after the recent market turmoil it appears investors still have an appetite for risk. Whether the risk taking is misguided is debatable, but the reality is if investors are more informed about the inherent risk they may be more comfortable taking risk. Though there still seems to be more questions than answers for investors to earn above average returns, they may need to be willing to take above average risks. That is not to say the stock market alone, real estate, bonds, or even commodities should be your sole focus it just means that investors need to educate themselves on the unique risks for each asset class and really ask themselves what type of beta they can handle in their portfolio. My suggestion would be to consult a professional in the chosen asset class that interests you and align yourself with someone that has a comparable take on the markets.

To find out exactly how we are positioning our clients in commodity futures and options,

Contact us today at 1-888-920-9997.

The DOE reported crude oil supplies were up 5.1 million barrels last week, supplies of gasoline were down 2.3 million barrels and heating oil supplies were up 200,000 barrels. This was the first gain in crude stocks since May. September crude oil was higher by $1.40, but the real story was the volatility as the weekly trading range was over $7. The trend line dating back to February held just below $63 and we experienced a mid-week reversal. Support is seen at the 9 day moving average at 66.85 followed by the 20 day moving average at 64.50. Resistance comes in between 70.50/71.00 followed by 74.00. September RBOB was higher by 11.56 cents last week, its first trade above $2/gallon since mid-June. Support comes in at 1.90/1.91 and resistance at 2.03/2.04, which had previously served as stiff resistance. September heating oil gained a measly 2.45 cents on the week. Resistance is seen at 1.85 followed by 1.88 with support at the 9 day moving average at 1.7775.

The DOE reported underground supplies of natural gas were up 71 billion cubic feet last week to 2.452 trillion cubic feet. Supplies are now up 23% from a year ago. September natural gas closed down 19 cents last week. Support is seen between 3.50 and 3.55 with resistance at 3.85 then 4.05. For new entries we would advise buying the November $1 call spreads; the settlement Friday on the $5/6 call spread was $2380. Before ruling this play out look at the weekly chart, you will see the last 3 weeks we’ve had higher lows.

October live cattle were higher by .625 last week and after multiple probes lower the 20 day moving average held. That being said we could see higher pricing so we advised clients to exit their October 86 puts at a loss of approximately $200 per option. We will wait for further evidence before getting long but we do not wish to be short. Support is seen at 89.40 with resistance at 90.50 followed by 91.00.  September feeder cattle was lower by 10 ticks but much like live cattle the 20 day moving average at 101.70 acted as support. We should see resistance at last week’s high just above 103.10.

We expect last week’s low in October lean hogs to serve as an interim bottom. Support comes in at the double bottom formed last week at 51.75 with resistance first at 55.15 followed by 56.20. We advised clients to buy October 60 cent calls last week for $540. This was for new entries and to average out with the clients that already own August 62 cent calls.

Stocks: The million dollar question was asked in Barron’s over the weekend” How much of the recession’s passing is already priced into stocks?” The S&P was higher by 7.50 points last week to trade to a fresh high for 09’. We are still not ruling out a test of 1000 before prices back off but we will remain consistent and reiterate that we do expect a sell off very soon. That being said we were light buyers for clients in the ES September 925 puts for $800 last week as we expect in the next 2/4 weeks a trade down to 945/950. The Dow was higher by 75 points last week, gaining over 1000 points or 13% just in the last 3 weeks. With July now behind us the Dow put in its best monthly performance in more than 7 years, do things feel that good? Resistance is seen at 9200/9225 with support at 8990 followed by 8825. A trade back down to the 50 day moving average would only be a correction of 6%. We have suggested for clients to lighten up on those stocks in their portfolio that have gained over 50% since the March lows.

Bonds:  September 30-yr bonds were higher by 2’25.5 points last week to trade to their highest level in 2 ½ weeks. Resistance comes in at 120’00 with support at 118’00 followed by the 40 day moving average at 117’00. September 10-yr notes were bid higher as well gaining 27.5 ticks last week. Support is seen between 116’11 and 116’17 and resistance between 117’28 and 118’00. We advised clients last week to exit their NOB spreads at a profit of roughly $1500 per spread as we reached our target. We also advised clients to lighten up on their Euro-dollar puts as we expect a trade higher in the near term. However we would sell into this rally and look to re-establish these positions in the coming weeks buying more June & September 10’ puts. The NFP # guess comes in at a loss of 375,000 jobs for the month of July and an unemployment rate of 9.6%.

The Euro was lower by 27 ticks last week just off the week’s high. Resistance comes in between 1.43/1.4325 while support is seen at 1.4150 followed by 1.4025. We have no opinion on direction and would advise playing the breakout above resistance or below support. The ECB is expected to do nothing with rates this week keeping them at 1.0%.

The Swissie gained 10 ticks last week on 2 sided trading. Resistance is at .9425 with support at the 20 day moving average at .9280 followed by .9200.

The Loonie was a winner again last week picking up 55 ticks. Last week’s high at .9306 should serve as resistance with support at .9150 followed by .9000. Follow metals and energies to determine the direction.

The Kiwi gained 4 ticks last week as prices appear tired. Resistance comes in at .6625 with support at .6490 followed by .6420. We are currently on the sidelines with clients.

The unemployment rate in Japan increased from 5.2% to 5.4% in June, the highest in 6 years. The yen was a loser last week by 11 ticks. Last week’s low at 1.0432 should support with resistance seen at the 20 day moving average at 1.0630. We advised clients to cut losses on the 110 call options recommended last week losing just over $200 per option. We’re currently on the sidelines though we have a bullish bias.

The September Australian dollar closed up 174 ticks last week after positive comments from a Reserve Bank Governor caused some to believe that there may be no more cuts in interest rates. Prices traded to their highest level since 8/8. Resistance is seen at .8400/.8450 and support is eyed at .8200.

The Cable gained 246 ticks last week but at this point we feel prices have gotten a bit ahead of themselves and have advised clients to buy September 160 puts, we paid between $550/600 and have a target of $1000. Resistance is at 1.6750 followed by 1.70000 while support is at the 20 day moving average at 1.6375. We expect no action to be taken on rates by the BoE this week though there may be more gibberish on the quantitative easing program.

The US Commerce Department reported GDP was down .2% in the second quarter and down 2.4% from a year ago, better than expected. Ironically, this good news was used to drive the September dollar down to a new contract low as investors relaxed their need for a safe haven. The dollar lost 36 ticks last week as prices failed to get through the 20 day moving average on 2 attempts. This should continue to act as resistance at 79.60 with support at 78.30. Though we still expect a bounce, on a massive exit from the dollar and lack of flight to quality lower pricing is possible, for now we remain cautiously optimistic.

The upward extension in corn and soy beans was principally due to an explosive export number last week. If this was not a flash in the pan look for more upward pressure in coming weeks.

September corn was higher by 22 ½ cents last week trading to a 3 week high and with prices now above the 9 and 20 day moving averages we expect further upside. Our target in December remains $3.50 followed by $3.70. Our client’s currently own December $3.80 and $4 calls at a profit and are looking for more. Support in September is seen at 3.20/3.25 with resistance at 3.50.

August soybeans were higher by $1.14 ¾ moving 11% on the week, trading higher all 5 sessions. Support comes in at 11.00 followed by 10.80 with resistance at 11.50 then 11.80. Those of you who are long November outrights or the $1 call spreads we’ve recently recommended, we would suggest putting in profit orders. Additionally, it appears one of the CTA’s we work with made a brilliant call getting long December soy meal, did any one follow? This too made a nice move gaining 8% last week.

September CBOT wheat was higher by 12 cents last week as it appears a base is building and at minimum we should get a bounce from oversold levels. Support is seen at 5.15, resistance at 5.35 followed by 5.45. September KCBOT wheat was higher by 9 ½ cents last week. Support comes in between 5.46/5.50 with resistance at 5.65 followed by 5.75. The same scenario exists in the December KCBOT/CBPOT spread; we like buying between 16-19 cents with a target of 35 cents risking to a stop close only below 10 cents.

September cocoa was lower by $28 last week after multiple failed attempts to get through resistance at 2925/2935. Support is seen at 2785 followed by 2700. We expect prices to make their way to 2660 in the next 2/3 weeks. We currently own October 2500 puts for clients and are down $190 per option.

October sugar was higher by 16 ticks last week taking prices to a 3 ½ year high. Prices have made their way to higher ground 14 out of the last 18 sessions but this has taken prices to extremely overbought levels. We are now hearing whispers of 20 cents/lb. Resistance comes in at 18.90 and support at 18.50 followed by 17.90. We would like to see a trade back to 17.25 before re-establishing longs for clients.

October cotton gained 93 ticks last week closing just below the 50 day moving average. Support comes in at 55.50/56.00 with resistance between 59.25 and 59.75. We are thinking about getting clients long December, but at this time it’s just a thought. Being that Texas is the leader in cotton production in the US and they are experiencing one of the worst droughts in many decades we find it tough to believe we will not get some upward movement in the coming months. No new recommendations at these levels.

September orange juice was lower by 4.95 cents as what goes up must come down. In the last 2 weeks OJ is lower by 12%. Resistance comes in at 94.00 and support at the 50% Fibonacci level at 90.00 followed by the 200 day moving average at 88.00. We may look to get long again with clients but we feel there could be an additional 3-5 cents pullback so stay tuned.

September coffee was higher by 3.85 cents last week. We advised clients to cover their positions at a small profit or break-even trade as we thought resistance was going to cap prices. Perhaps we left too early but the good news is we took that money and went into gold which for now looks like a good call. Support is seen between 123.00/123.50 and resistance at 128.50 followed by 132.50; which would be a 61.8% Fibonacci retracement. Hindsight being what it is, the December 130/145 call spreads may have been the play as prices settled at $1670 Friday and we originally paid $1250. The lesson here is both entry and exit on trades is very important.

September silver was higher by 5 cents last week but the reversal higher mid-week was nothing short of spectacular as prices closed 77 cents off the weekly lows. This pattern could signal higher prices are to come being we closed back over the 100 day moving average and are fast approaching the 50 day as well. Support comes in at 13.60 while resistance is seen at 14.20 followed by 14.60. We continue to buy December $3 call spreads for clients.

December gold gained just $1.30 last week, which does not seem like much but after further investigation, much like silver, gold experienced a dramatic reversal mid-week that carried prices back over the 100 day moving average and almost $30 off the weekly lows. Support is seen at 942/945 with resistance at 962/968 followed by 986. Friday, when gold was higher by $6, we advised clients to buy October 975/1025 call spreads for $800. Some are still waiting for a further pullback but meanwhile we traded higher by an additional $12 that day and those spreads settled up by almost $400. The moral is you never can outsmart a market and if you want to be long get long. Keep an eye on the dollar and the stock market to determine the immediate direction.

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. There are no guarantees of market outcome stated, everything stated above are our opinions.