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.

For July 27th– July 31st 2009

By: Matthew Bradbard

When I started working in commodities, almost a decade ago, they were considered a dirty word and certainly not a place for the average Joe to invest. Within the last few years, thanks to investors becoming more open minded, the overall performance of commodities and other asset classes, commodity futures and options are quickly becoming a respectable asset class. Case in point, over the weekend while reading the WSJ there were 3 different scenarios and portfolio allocation suggestions, regardless of the scenario all 3 had a place for commodities. One that fears inflation should have as much as 25% allocated to commodities, one fearing deflation only a 10% allocation, with the middle of the road being 15%. While we agree with the percentages we suggest investors get more informed on trading futures and options not just commodity ETF’s.

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 that crude oil supplies were down 1.8 million barrels, supplies of gasoline were up 800,000 barrels while heating oil supplies were also up 800,000 barrels. September crude oil ended higher by $3.68, the highest close since 7/2. The pivot point currently stands at the 50 day moving average of $67. $68.50/69.00 should act as resistance with support at $65.00. The easy money has been made on longs being that in the last 10 sessions prices have gained 11%. September heating oil was higher by 13.93 cents last week. Support comes in at 1.78 followed by 1.75 with resistance seen at 1.86/1.87. On a further rise in crude we could see 1.90, if long trail stops. September RBOB gained 14.30 cents last week though prices are starting to look toppish. We’re not advising getting short but we could see a setback, follow crude’s lead. Support is seen between 1.83 and 1.8450 with resistance at 1.9250.

The DOE reported that natural gas supplies were up 66 billion cubic feet last week to 2.952 trillion cubic feet. September natural gas closed up 4 cents last week with a trading range of almost 40 cents. A potential double top formed last week at $4.05 as prices failed to get through the 50 day moving average after 2 attempts. That level should serve as resistance at $4.03 with support at $3.65. We are still advising clients $1 call spreads, on multiple positions split the purchase between October and November.

Cattle on feed: the USDA said that there were 101.8 million head of cattle in the US on July 1st, down 1.45% from a year ago. They also said that there were 9.752 million head of cattle on feed as of July 1st, down 5.3% from a year ago and less than expected. June placements were down 8.4% from a year ago and marketings were up .6%. October live cattle were down 2.30 closing on the trend line. On a violation of 89.40 expect a trade to 88.00. At that level we should get 200 points for the 86 puts we own for clients. Resistance is seen at 90.50 with support at 88.50/88.75. September feeder cattle were lower by 2.45. Prices started the week at the 09’ highs and by Friday we had backed off testing the 20 day moving average at 101.50 which should serve as support. Resistance is at 103.00/103.50. More downside is expected.

October lean hogs traded lower all 5 sessions last week losing almost 600 ticks lower. Resistance comes in at 56.00 with support at the contract low at 53.95. Trade update: look to cover client’s August shorts this week at a profit on a trade below 58 cents, hold the August 62 calls and sell on the next rally. This is the danger of legging out of trades as we could have taken the calls off at a profit 1 week ago. With only 18 days and a 25% delta, in a perfect world prices are lower early in the week followed by an about face and a 300-500 point rally over the next 7-10 days.

Stocks:  Should we really be impressed with positive earning because the reality is that expectations were so low it was inevitable to get some good news. The truth is companies are beating earnings estimates because of slashing expenses and laying off workers, not by expanding revenue. The S&P traded higher by just over 40 points to a new 09’ high last week taking prices to extremely overbought levels. A 47% move off the March lows is impressive but not to be overshadowed by a 12% advance just in the last 2 weeks. As seen in our blogs last week we advised clients to exit all remaining ES longs in August and September. Support is seen at 954 followed by 930 with resistance at 1000.  The Dow was a gainer of 364 points experiencing its first close above 9000 in 8 months. Support comes in at 8900 followed by 8750. Recognize that we could see a 450-600 point correction with no chart damage if investors decide to book a profit so trail stops if long.

Bonds:  September 30-yr bonds were lower by 1 tick last week. Support is seen between 114’16 and 115’00 with resistance at 117’10/117’16. Technically the path of least resistance remains down, but we have no new suggestions. If investors do in fact book profits in equities follow the flow of money and expect a move higher as money moves from equities to treasuries. September 10-yr notes were higher by 1.5 ticks last week. Support comes in at 115’20/115’25 with resistance at 117’00. We’re still advising put buying in long dated Euro-dollars out until June and September of 10’.

The Euro was higher by exactly 1 penny last week closing at 1.4216. 1.4275/1.4325 serves as the sell zone as we expect prices to turn south temporarily. Support is first seen at the 20 day moving average at 1.4070 though we would not rule out a trade down to 1.39 in the coming weeks.

The Aussie was higher by 141 ticks last week nonetheless selling emerged near the highs last week. Resistance is seen at .8170/.8200 with support first at .8025 followed by .7900.

The Swissie was a gainer of 58 ticks last week as sideways action continued.  Resistance is seen at .9400 while the 20 day moving average at .9275 should support. We expect a move down to .9100 in the coming weeks, but for now have no positions on for clients.

The BoC met and kept its interest rate unchanged at .25% but at the same time raised their growth forecast for 10’. The Loonie was higher by 258 ticks last week having advanced 7% in the last 2 weeks. Stiff resistance is seen at .9270. On a 50% Fibonacci retracement prices should retreat to .8900 but first we must get through initial support seen at .9150.

The Cable was up by 90 ticks last week as prices trudged along. Resistance is seen at 1.6550/1.6575 with support at the 20 day moving average at 1.6370. We are not suggesting any futures plays but those looking to gain exposure with options could buy the September 160 puts. This option has 39 days and as of last Friday the settlement was $738. We have a target of $1200 on a 4-5 cent correction risking ½ the premium paid.

The yen lost 47 ticks last week and with the current market sentiment an inverse relationship to equities should continue. Resistance is seen at the 20 day moving average at 1.0600 with support at 1.0450. The chart points to lower pricing but the key will be what happens in equities.

The Kiwi was higher by 122 ticks last week trading to a new 09’ high but prices appear to be topping and though we do not wish to get short we expect a setback. Resistance comes in at .6610 and support at .6490.

The US dollar was lower by 62 ticks last week making this the third consecutive losing week. Resistance comes in about 100 points higher at the 20 day moving average at 79.90 with support between 78.60 and 78.70. That level should hold for now as we expect to see a sharp move up to 81/81.60 very soon.

Growing conditions continue to be nearly ideal for much of the Midwest. September corn was only lower by 5 ¾ cents last week after trading to the lowest level since October of 06’. We expect last week’s low to serve as an interim low at 304’0. Support comes in at 310’0 with resistance at 330’0. Clients currently own December $3.80 and 4.00 calls. What could act as the turning point is that last week the USDA’s National Agricultural Statistics Service said that it was going to ask growers to update their planted corn acres in seven states that had trouble with late planting due to wet weather. The new figures will be included in the USDA’s August 12th report. December corn jumped on this news with the expectation that 1-3 million acres may have not gone to corn.

August soybeans traded up by 7 ¾ cents last week and though we cannot rule out another 30-50 cent break back to the recent lows the chart is starting to look a bit more friendly. Support in August is seen between 10/1010’0 with resistance at 1035’0/1040’0. Those still wishing to get long should look towards November and if forced to be in soybeans we like the $11 calls for $1100 or the $10/11 call spreads for just under $1000. We still prefer a position long corn as opposed to soybeans at this juncture.

September CBOT wheat was lower by 25 ¼ cents last week. Resistance comes in at 530’0/535’0 and support at 512’0 though we could see a test of $5. September KCBOT was lower by 17 ¼ cents last week. Resistance is seen at 565’0 followed by 575’0 with support at 542’0. We have no client exposure currently in wheat but we are following the December KCBOT/CBOT spread. We like buying this spread at 16-19 cent KCBOT premium to CBOT. We would suggest risking a stop close only at 10 cents and have a target of 35 cents.

September cocoa gained $134 last week trading above 2900 which had not happened in 11 months. If the US dollar moves higher as we expect we should see a sizeable pullback so we‘ve bought clients October 2500 puts. We paid $350-370 and are currently holding a loser. Last week’ high around 2920 should act as resistance with support at 2840 followed by 2750. In the next 3 weeks we expect a trade down to 2660.

October sugar closed up 98 ticks to a new contract high, supported by expectations for a production deficit in 09’-10’.So much for the expected pullback? Be patient and although we missed the last leg up with all clients we are still anticipating a back off. 18.50 should act as resistance with initial support at 18.00. On a trade back to 17 cents, near the 50 day moving average, we will look to re-establish longs for clients.

October cotton fell 4.51 cents last week finally closing lower after 4 positive weeks. The US cotton crop is getting substantial relief from the hot and dry conditions that started early in the summer. We have clients positioned in October 55 cent puts; we paid $600 and have limits in for $1000 currently which should be filled on a move to 55/56 cents. Resistance is seen at 59.00 with support at 56.00 followed by 54.00.

After gaining 40% in three weeks, September orange juice closed down 7.55 cents last week, blamed on profit taking. Resistance comes in between 98.00 and $1.00 with support eyed at 93.65; the 38.2% Fibonacci retracement. On a move to 88/90.00 we may get clients long once again.

September coffee was higher by 4.95 cents last week. Resistance comes in at last week’s high which serves as the 38.2% Fibonacci retracement level near 125.00. Once prices get through that level next stop should be 127/128 where we will exit out December 15 cent call spreads for clients. We paid between $1000-1250 and have a target of $1875 or 5 cents per option spread. Support is seen at the 200 day moving average at 122.35.

August gold closed up $14.60, the highest close in five weeks. Resistance comes in at 955/959 but on a trade above that level we see no significant resistance until 980. Support is seen at 944 followed by the 50% Fibonacci retracement level at 929. We have advised clients to lighten up on their October contracts and will be advising fresh entries to trade December contracts. We are currently directing the purchase of $100 and $150 call spreads in December. Buying gold on or around July 27^th and holding until September 1^st has been profitable 26 out of the last 33 years with a success rate of 79%. The last 9 years in a row have provided an amazing win streak, with a cumulative profit of $9,670 per 100 troy ounce futures contract. Past performance is not indicative of futures results. Moreover options do not move 1 for 1 with the underlying futures market.

September silver closed up 47 cents, the highest close in two weeks. Prices have traded higher 8 out of the last 10 sessions. Resistance is seen at last week’s high just above 13.90 followed by 14.20. Support comes in at the 100 day moving average at 13.58 followed by the 20 day moving average at 13.38. We are buying clients December $3 call spreads. If the US dollar was to rally as predicted we could see a setback to 12.50/13.00 where we would be a buyer with both hands for clients. If forced to pick either long exposure in gold or silver we prefer silver.

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.

By: Matthew Bradbard

I communicate with investors daily trying to identify what their general position is for the economy. Though it differs from one to the next, an overwhelming majority are not too optimistic about the health of the economy. The overall sentiment is that few see the light at the end of the tunnel. By that I mean most investors sense we’ve yet to turn the corner. What I try to make them realize is that while the overall economy is yet to be back on track, there are many individual stocks, bonds, real estate transactions and commodities that offer phenomenal opportunities. Take that for what it is worth, I only trade commodities so if looking at other asset classes consult a professional. What I’m trying to relay is I see the light at the end of the tunnel for some specific commodity plays.

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 down 2.8 million barrels, supplies of gasoline were up 1.5 million barrels while heating oil supplies were up 500,000 barrels. September crude oil closed up $3.78 as the 100 day moving average held on all tests last week. Support is seen now between 62.50 and 63.00 with resistance at the 50 day moving average at 66.50. We bought clients October $68/73 call spreads on Friday for $1770 expecting a $5-8 appreciation in the coming weeks. September RBOB was higher by 11.10 cents last week closing an impressive 16 ½ cents off the lows. Support is seen at 1.71 with resistance at the 50 day moving average at 1.8125. We expect a move up to 1.87 in the coming weeks. September heating oil gained 10.73 cents last week gaining 4 out of 5 sessions. Support comes in at 1.6250/1.6350 with resistance at the 50 day moving average at 1.73.

The DOE reported that underground supplies of natural gas were up 90 billion cubic feet last week to 2.886 trillion cubic feet. September natural gas jumped 38 cents gaining for the first time in 4 weeks. This was largely aided by a 12% gain on Thursday. Support is first seen at 3.60 followed by 3.40 with resistance at 4.00 followed by 4.10. We still like the idea of October $1 call spreads but some clients have suggested an additional month. Furthermore, on setbacks we will be buyers of futures still thinking we could see 80 cents to $1 higher from here in the next 6-10 weeks. Buying natural gas on or around July 24 and holding until October 21 has been successful 17 out of the last 18 years for a success rate of 94%. Past performance is not indicative of futures results.

October live cattle were higher by 3.125 last week trading to their highest level since January. We continue to hold put spreads for clients and are currently carrying a loss. We expect an abrupt turnaround in the next few weeks and would suggest option players to get positioned short. Resistance is seen at the January high at 92.70 with support at 90.75. August feeder cattle were higher by 1.55. Resistance is seen at 105.00 and support at 103.00. Prices may in fact go higher, but it will be without my clients. If and when grains start to move higher, feeder cattle should weaken and we think that is soon. We’re not advising to get short but we don’t want to be long.

August lean hogs traded higher by 975 last week and although it is too early to definitively say we may have formed an interim top is what it’s starting to look like it. Resistance comes in at 65.60/66.00 with support at 63.25. Short term it appears prices could come down but medium and longer term we like being long.

Stocks: Equities snapped a four week losing streak in fashion with the Dow and S&P gaining all 5 sessions last week. The Dow was higher by 611 points or 7.6% getting back a majority of the losses from the previous 4 weeks. The S&P was also a gainer picking up over 60 points to close 7.1% higher. From here it looks like we will see a test of the June highs. If we get through that threshold more buyers will likely enter. If we fail to get through those levels we will most likely see some profit taking. We tend to think we’ll get through those levels and have clients currently long August and September ES calls. On a test of 950 exit the August calls and on a breakout towards1000 exit your September calls. The 50 day moving averages should act as support with the June highs acting as resistance. Support on the S&P at 908 and the Dow at 8400 with resistance at 950 and 8825 respectively.

Bonds:  Minutes from the Federal Reserve’s latest meeting were released last week “the economy remained very weak, though declines in activity seemed to be lessening.” They also stated that “consumer spending appeared to be holding reasonably steady” and “consumer price inflation was fairly quiescent in recent months…” This to me is just more sugar coating about an economy that has yet to see the worst, but I hope that is just the pessimist in me. September 30-yr bonds were lower by 4’15.5 points trading to a 3 ½ week low. This was the largest weekly decline in 6 weeks; low and behold MB Wealth foreshadowed this in our commentary last week. Resistance comes in at 117’05/117’10 with support at 115’00. September 10-yr notes were lower closing down 2’11.5 points. Resistance comes in at 117’00/117’05 with support at 115’16. The path of least resistance remains down. Continue to short Euro-dollars. After tracking various months for the last few weeks we are starting to suggest clients to move out to June or September 10’ contracts on fresh entries.

The Euro was higher by 195 ticks last week closing near resistance which comes in at 1.4200 with support seen at 1.400. As long as prices stay above 1.3970; the trend line for the last 2 weeks we should see higher ground.

The Aussie gained 244 ticks last week to close back above the 20 day moving average which should serve as support at .7915. This was a reversal of almost 3 ½ cents. Resistance is between .8075 and .8100. We would not rule out a surge higher to .8150 on continued commodity strength though we currently have no exposure with clients.

The Swissie gained 89 ticks last week as it continues to play a follower’s role to the Euro. Support is seen at .9170/.9200 with resistance at .9390. Prices could go either way so stand aside.

The Loonie was higher by 354 ticks, a gain of over 4%. As we projected last week, as soon as prices closed above the 20 day moving average look for more upside. The easy money has been made on longs while we may get higher pricing depending on the action in metals and energies. We prefer at this juncture to cut out the middle man and just be long energies and metals especially being we have a BoC meeting this week. Although we expect no policy changes we could have some increased volatility. Support at .8850/.8880 and resistance at .9000.

The Cable was gained 194 ticks last week after 2 losing weeks. Prices have been range bound now in a 7 cent range for the better part of 8 weeks and at this point we have no opinion. Resistance is at 1.6575, support is at 1.6175.

The yen lost 206 ticks and looks as if there is more downside to come. The 20 day moving average at 1.0566 and trend line at 1.0540 should hold but we do expect a test. Resistance comes in at 1.0700 followed by 1.0800.

The Kiwi was higher by 184 ticks. Support is at the 20 day moving average at .6350 with resistance at .6500. We do expect a higher trade but are not confident enough to put money in play.

The US dollar lost 90 ticks last week closing at its lowest point in 6 weeks. A close below 80.00 is psychologically demoralizing but a close below 79.00 would be more technically damaging, most likely signaling further downside. Support is at 79.00 with resistance at the 20 day moving average at 80.35.

September corn was lower by a nickel last week, closing lower 5 out of the last 6 weeks. Prices appear to be oversold on the daily chart and nearing that in the weekly as well so don’t get too short! The story remains the same as last week, near ideal conditions are factored in and if we get any thing less than ideal, prices should move higher. Last week’s low at 316’2 should support with resistance at 330 followed by 340. Trade ideas: Long December futures with a stop below 322 or get long December via futures or options while simultaneously buying September puts for protection.

August soybeans were lower by 35 ½ cents and have lost 14% in the last 5 weeks. Support is seen at 975 with resistance at 1025 followed by 1050. Those who want to be long look to November, though we’ve yet to commit any client funds. Outside of just trading soybeans remember there may be opportunities in soybean meal and soybean oil. We may have some suggestions in the blogs this week.

September CBOT was higher by 21 ¾ cents last week closing just below the 20 day moving average. Support is seen at 525 with resistance at 550 followed by 560. For option buyers we’re looking at the September $5.70 calls for $600, for option sellers we’re looking at the September $5.20 puts for $600. September KCBOT wheat gained 19 cents, closing higher for the first time in 7 weeks. Support is seen at 550 with resistance at 575 followed by 590.

The National Confectioners Association said that the North American cocoa grind totaled 105,123 tons in the second quarter, down 6.75% from a year ago, but better than expected. The question remains whether chocolate is recession proof? September cocoa closed up $129, the highest close in 4 weeks. Resistance comes in at 2800, support at 2650. Had you moved on our recommendation from last week based on Fridays’ settlement you should be carrying a $500 profit per spread.

October cotton closed higher by 1.70 cents marking the fourth consecutive positive week. We expect 62.50 to act as formidable resistance. Support is first seen at 60 cents followed by the 50 day moving average at 58.40. We bought clients 55 cent puts last week to play a pullback. We paid $600 and have a target of $1000+.

September orange juice closed up 10.45 cents, the highest close in over eight months. We made good money for clients in an orange juice option trade in recent weeks and yes we may have left prematurely. I’m guilty of leaving a lot of money on the table but greed in trading is not necessarily good. On a 10 cent setback we may look to get positioned long again for clients. Resistance comes in at 1.05 with support at 98.00 followed by 93.00.

October sugar closed up 5 ticks as we continue to wait for a lower entry for clients. Resistance is seen at 17.80 with support at 16.90. On a trade to 16.73, the 50 day moving average we will start to price out March 10’ calls for clients.

September coffee gained 4.60 cents last week to register its first positive week after 6 losers. We are advising clients to buy December 15 cent call spreads expecting a 10 cent plus move in the coming weeks. Support is seen at 114.50/115.50 and resistance at 120.00.

We do not trade lumber or milk often but both are starting to look like a buy…any suggestions?

August gold was higher by $25.20 last week closing about $10 above the 100 day moving average at 927. Resistance is seen at 944 followed by 959. We would advise buyers of October to look at outright calls; we were buyers of October 1050 calls for clients last week. For traders who want a bit more time we would look to December for the purchase of $100/$150 call spreads. We favor being long and are ultimately expecting a test of $1000/ounce by year’s end.

September silver was higher by 74 cents last week closing nearly $1 off the lows. $13 should act as support and as long as prices stay above that level on a closing basis we are happy being long futures with clients. Resistance is seen at 13.75 followed by 14.20. We continue to buy fresh entries $3 December call spreads. Look for our special gold and silver report out this week.

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 July 13th– July 17th 2009

By: Matthew Bradbard

Speculators may be running for the exit doors on talks of more government involvement in the futures market, but I feel their exit may be premature seeing that the government is just talking at this point. Since the government has not screwed things up enough they are now discussing more stringent controls in the commodities markets. I welcome regulation when it works and the theory of instituting position limits sounds good, however the likelihood of volatility decreasing on that action is debatable. Contrary to popular opinion it is the speculator that plays a vital role in providing liquidity in the marketplace and without their involvement price distortions may in fact increase. Is it completely impracticable to think that changes in supply & demand could have a more significant impact on pricing? Perhaps the fact that commodities are becoming a more mainstream asset class, recent estimates show that $25 billion has poured into commodities in the first half of 09’.

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 down 2.9 million barrels, supplies of gasoline were up 1.9 million barrels and heating oil supplies were up 2.0 million barrels. August oil traded lower by $5.65 losing ground 7 out of the last 8 sessions, the longest losing streak since December. Support comes in at the 100 day moving average at 58.82 followed by 56.00. Resistance is at 62.00 followed by the 50 day moving average at 65.15. Currently we have no exposure with clients. August RBOB was lower by 10.25 cents. A potential triple bottom has formed between 1.6250 and 1.63 but stronger support is seen at 1.55/1.56. Being prices are extremely oversold we may see a bounce, resistance is first seen at 1.72 followed by 1.77. August heating oil lost 16.94 trading lower the last 8 consecutive sessions. Prices at the end of the week started to show some resolve closing almost 4 cents off their lows. Support at 1.50 resistance at 1.60.

The DOE reported underground supplies of natural gas were up 75 billion cubic feet last week to 2.796 trillion cubic feet. Supplies are now up 27% from a year ago. August natural gas was down 24 cents to a new contract low. We’ve been buying clients October $1 call spreads now for the last 3 to 4 weeks and are down but not out. If we do not see a reversal within the next 7/10 days we may start buying November instead of October. Last week’s low at 3.34 should support with resistance at 3.60 followed by 3.80.

The USDA expects beef production to be down 1% in 10’ keeping their estimate of choice steers unchanged at 90.5 cents per pound. August live cattle were lower by 1.40 losing ground 5 out of the last 6 sessions. Support is seen at the 20 day moving average at 83.00 with resistance at 84.45/84.60. Trade idea: from a livestock CTA that we trade with, that is up 27% ytd, we have positioned client’s short October live cattle in an 86/81 put spread; contact us for pricing and objective. August feeder cattle were lower by 70 ticks last week. Support comes in at 101.50 with resistance at 104.00. Food for thought, prices look overbought and typically when corn moves higher feeders move lower, though we have no exposure with clients.

The USDA estimated pork production will be down 1% in 10’ and they expect the price of barrows and gilts to average 48 cents per pound (65 cents lean). August lean hogs were higher by 2.40 last week trading up almost 4%. This was the first close above the 20 day moving average in 3 months. We remain short futures and long (2) August calls for clients which is a bullish strategy. If you need an explanation on why, contact us. Support is seen at 61.50/62.00 resistance at 65.75.

Being that production is projected to be down in both cattle and hogs if and when demand returns to the market we should see a bull market that has legs.

Stocks: The quote of the week, “We misread how bad the economy was, but we are now only about 120 days into the recovery package.”  Joe Biden. Equity markets were lower last week as we predicted. The September Dow futures lost for the fourth week running, giving up 145 points to close just below 8100. The S&P 500 lost 17.75 points virtually 2% to break the neckline and close below support from mid-May.  We continue to favor short positions and suggest investors that refuse to lighten up in their equity portfolios to institute hedges. The problem continues to be that positive news is lacking and traders may soon take shelter until something constructive happens in any asset class. With second quarter earnings this week remain agile.

Bonds:  September 30-yr bonds gained 1’27 points last week trading to a 7 week high. Volatility has picked with wider trading ranges last week which generally happens at markets tops or bottoms. We would advise taking off all longs and expect a shift lower from here. Resistance comes in at 121’16 with support at 119’10. September 10-yr notes also gained last week, picking up 1’26.5 points. Like bonds, we expect yields to rise and prices to retreat. Resistance comes in at 119’10 with support at 117’10. Get short March 10’ Euro-dollars via futures or options. We expect last week’s high to serve as an interim top. You can buy an at-the-money put with over 8 months time currently for $600.

The Euro was lower by 11 ticks closing just under the 20 day moving average. These were the first back to back losing weeks since April. Support comes in between 1.3825/1.3850 with resistance at 1.4075.

The BoE met and kept its interest rate unchanged at 0.50%, but surprised many saying they would not expand their program of quantitative easing. The Cable closed lower by 98 ticks last week. We forecasted a down move and were right but didn’t take any action with clients. Resistance is seen at the 20 day moving average at 1.6371 with support at last week’s low just less than 1.6000.

The September Canadian dollar finished down 9 ticks trading at the lowest level in seven weeks pressured by a drop in energies and metals. Last week’s low at .8530 should support with resistance at .8680. On a close above the 20 day moving average at .8685 a resumption of the uptrend is expected. We’ve not seen a close above this level since 6/12.

The RBA met and kept interest rates unchanged at 3.0%. The Aussie was down 177 ticks as it looks like a downtrend has begun. Resistance comes in at the 20 day moving average just above .7900 with support at .7650 followed by .7500.

The Swissie gained 27 ticks last week closing higher 4 out of the last 5 weeks. Support is seen at .9100 with resistance at .9325/.9340. Indecisiveness remains so we have no trade ideas presently.

The yen gained 422 ticks last week trading to a 5 month high. Did anyone take our trade recommendation from last weeks’ commentary on the September 110 calls, if so you’re welcome! Support is seen at 1.0740 followed by 1.0650 with resistance at 1.0940.

The Kiwi lost 2 ticks last week, largely a non-event. Resistance is at the 20 day moving average at .6332 with support at .6170. Prices could go either way so stand aside for now.

The US dollar index gave up 18 ticks last week. We suggest trading the break out above resistance at 81.20 or below support at 79.70. Nothing notable came form the G-8 meeting last week on the dollar as the world’s reserve currency.

The USDA’s 09-10 US ending stocks estimate for corn was increased from 1.09 to 1.55 billion bushels. September corn lost 13 ¾ cents last week as selling continued. Signs of life were exhibited Friday even after a new low was made, prices rallied to close nearly 10 cents of their intra-day lows. We are suggesting clients to buy December $4 calls, paying 10-12 cents last week anticipating a double in premium in the coming weeks. The risk/reward dynamic is favorable being all the news that has taken prices to recent depths is factored in, so any positive news and we could see a noteworthy rally. Support comes in at last week’s low in September at 3.18 ½ with resistance at 355/360.

The USDA’s 09-10 US ending stocks estimate for soybeans was increased from 210 to 250 million bushels. August soybeans were lower by just shy of $1.00; representing a $5,000 move per contract. One must have intestinal fortitude to trade beans in this environment being the weekly trading range represents almost $7,500 per contract. Support comes in between 10.15/10.20 with resistance at 10.60 followed by 10.80. Those wanting to get long should look to November. A client pointed out that the fundamentals are more favorable to beans than corn which is accurate, but I prefer the chart in corn. Traders could gain long exposure by purchasing $11 calls for $1,250 or the $10/12 call spread for $1,500.

The USDA’s 09-10 US ending stocks estimate for wheat was increased from 647 to 706 million bushels. September CBOT lost 10 ½ last week. Last week’s low at 5.12 ¼ should support with resistance seen at 5.30 followed by 5.40. The current chart is reminiscent of the orange juice chart weeks ago before the recent moved ensued. We expect a short covering bounce at minimum. September KCBOT lost 16 ½ cents last week though we did have 2 consecutive positive days which had not happened since late May. Support is seen between 5.40/5.43 with resistance at 5.62/5.65.

September cocoa traded higher by $175 last week filling a gap from 6/16. Resistance comes in at 2700, support at 2590. Trade idea: sell (2) September 2800 calls collecting approx. $1,250 while simultaneously buying (2) December 2800 calls for approx. $3,800. The cost on the trade would be roughly $2,500. On a move higher from here expect to make 30% of the futures move. On a sideways market or down market the September will go worthless and you will trade at a later date out of the December.

The USDA’s 09-10 US ending stocks estimate for sugar was reduced from 459,000 to 359,000 tons. October sugar lost 19 ticks last week and though prices have backed off we do not think prices have come off enough to justify re-establishing longs for clients. Resistance is seen at the 9 day moving average at 17.45, support comes in at 16.90 followed by 16.50. We are looking to buy March 10’ calls but premiums are a bit rich now.

The USDA’s 09-10 US ending stocks estimate for cotton was kept unchanged at 5.60 million bales. October cotton was higher by 1.30 cents gaining for the third week in a row trading to a 5 week high. Resistance comes in at 61.25/61.75, support at 57.00. We suggest buying on a break. If the global recovery comes into question prices could back off sharply so no rush.

September orange juice closed up 14.15 cents up 18% on the week to the highest level in over a month. We suggested clients to take 75% of their November $1 calls off at a double so they will have none of their money exposed and to gamble with the markets money. If prices continue to rise and approach $1 we will take off the remainder. Support is at 89.00 followed by 84.00 with resistance at 96.50.

According to Dow Jones, rain and colder temperatures are expected in Brazil’s coffee regions, possibly disrupting the harvest. Last week September coffee ended lower by 3.50 cents to the lowest level in 4 months. We still do expect a move higher and will stay the course with clients holding December 15 cent call spreads. Support comes in at 112/112.50, resistance at the 9 day moving average at 117.45.

September silver lost 78 cents last week trading within 6 cents of the 200 day moving average. We advised clients to buy back the top leg of their previously purchased call spreads and we were also fresh buyers adding to their position on December $14/17 call spreads at $2,150. We feel that silver has overshot to the downside and expect a speedy recovery from oversold levels. Support should hold at the 200 day moving average at 12.45 being a 50% Fibonacci retracement is at 12.43.  Resistance is seen at 12.90 followed by 13.25.

August gold traded lower by $19.50 last week though we may have formed a triple bottom between 904/905. We will find out early this week if that level will hold or if the market will attempt a test of 900 being we are so close. If 900 were to give way expect a move to the 200 day moving average at 883. We feel this is unlikely unless stocks get hit hard or you see a significant rally on the dollar, in other words monitor outside markets. Resistance comes in at 925 followed by 945. On fresh purchases move the $100 call spreads out to December and if content with the time in October just buy $1000 calls for under $1,000. Friday’s settlement was $960, with a delta of 20% and over 2 months time this could work on a continuation of the up trend right away.

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 July 6th– July 10th 2009

By: Matthew Bradbard

With half of 2009 behind us investors may be wondering if they have enough exposure to commodities in their portfolios. Several commodities gained value in the first 6 months of the year on expectations for a global economic recovery and on worries of inflation. There are many uncertainties that remain unanswered, if, how strong, and the sustainability of this recovery. It may be smart to cover some of your commodity longs or scale back your exposure as it appears that in the immediate future we could see some give back. We’re convinced this will not be a reversal but yet just a pause in a bull market with many more years of life.

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 down 3.7 million barrels, supplies of gasoline were up 2.3 million barrels while heating oil supplies were up 2.8 million barrels. August crude oil was lower by $3.62 closing lower for the third consecutive week; the first time this has happened since February. Resistance is seen at $70, support comes in at the 50 day moving average at $64.56 followed by the 50% Fibonacci retracement level at $61.90. August heating oil traded lower by 11.21 cents closing below the 50 day moving average for the first time since 4/30. Resistance comes in at 1.72/1.73 and support at 1.60/1.61. The daily chart is oversold but the weekly chart is still overbought, stand aside for now. August RBOB lost 12.13 cents last week also closing below the 50 day moving average. Resistance is seen at 1.80 and support at 1.70 followed by 1.64. The heart of the summer driving season has done little to prices being fewer travelers are on the road. Assuming a 50% retracement from where the run higher started back the first of the year prices could still come off an additional 30 cents. At this point we have no interest.

The DOE reported that underground supplies of natural gas were up 70 billion cubic feet at 2.721 trillion cubic feet. Supplies are now up 29% from a year ago. August natural gas dropped 45 cents taking prices to their lowest price in nine weeks. Prices are approaching the bottom of the range we’ve been in for the last 4 months between $3.60 and $4.90. Support is seen at the contract low at 3.52 with resistance at 3.75 followed by 4.00; the 50 day moving average. We’re still advising clients to accumulate October $1 call spreads.

August live cattle closed up 2.075, the highest close in almost five months, helped by improving economic conditions and reduced numbers of available cattle. Support comes in at 84.00 with resistance at last week’s high just above 86.00. Trade idea: long December live cattle/ short October live cattle at -50. Currently December is under but we’re expecting it to move to a premium to October. August feeder cattle were higher by 4.50. Support comes in at 102.40 followed by 101.40 with resistance at last week’s high just above 104.0. If you are currently long we would recommend moving to the sidelines.

August lean hogs closed up 3.25 on the week as prices have advanced 7% off their contract lows in just 5 sessions. Support is seen at 59.00 with resistance at 62.00. For clients the only exposure we have is short futures and long (2) August 62 calls. The delta is currently 47% but as prices become more intrinsic they will gain more in their options than lose in the futures. An alternative play would be to just buy October 60 cent calls for $1200.

Stocks: For stocks to move out of their recent range and have any chance of higher ground the economic growth must catch up to the markets’ expectations, which we think is doubtful. Last week the Dow slipped for a third consecutive week losing 158 points, just less than 2% to 8281. The S&P 500 fell 22 points or 2.5% to 896. The NASDAQ gave up 42 points or 2.3% to 1797. As the second quarter concludes the latest rally seems to have run out of gas. Reflected in the lack of volume investors aren’t convinced a new bull was born. As long as prices stay below the 50 day moving averages we expect further downside; in the Dow at 8380 and the S&P 500 at 904. Setting the tone this week what comes out of the G-8 on economic policy, interest rates, the dollar remaining as the reserve currency, inflation vs. deflation and further credit developments.

Bonds:  The NFP # put the unemployment at 9.5% in June with a loss of 467,000 jobs, a larger loss than expected. September 30-yr bonds were higher by 20 ticks last week trading to their highest level since 5/22. We may still see 120’00 but trail stops on longs as prices have become overbought. Resistance comes in at 120’16 with support at 118’00. September 10-yr notes were higher by 17.5 ticks last week. Support is seen at 116’00 with resistance at 117’16. March 10’ Euro-dollars gained 10 ticks last week. Exhaustion was seen late last week and being prices are within 15 ticks of their contract highs we love the risk/reward dynamic getting short at these levels. Continue to scale into short futures and buy puts in the March 10’ contract.

The ECB met and kept its interest rate unchanged at 1.0%. The Euro lost 33 ticks last week closing once again above 1.40. For now the 20 day moving average appears to be the line in the sand as prices have failed to close below that level after multiple attempts. On a breach of the 20 day moving average at 1.3990 expect a trade down to 1.38/1.3825. Resistance is seen at 1.4150.

The Aussie was lower by 111 ticks closing just under the 20 day moving average. The RBA is scheduled to meet this week and is expected to leave rates alone at 3.0%. Support is seen at.7825 followed by .7750 with resistance at .8050.

The Swissie was virtually unchanged gaining 2 ticks last week as sideways action continues now for the fourth week. The activity was anything but boring with last week’s trading range almost 3 ½ cents, with intervention still looming. Support comes in at .9140, resistance at .9270 followed by .9320. 

The Loonie was lower by 67 ticks as weakness in commodities may have contributed. Last week’s low at .8576 should support while resistance is seen at .8760. Trade ideas: buy the September 89 call for approximately $1,000, buy the 85/90 call spreads for $1,900 or get long the futures with stops below .8560.

The Cable was lower by 87 ticks last week. Resistance remains at 1.6650 with support now at 1.6200. We’re expecting a down move but currently have no exposure with clients. The BoE meeting should bring no change in rates which are expected to stay at 0.50%.

The unemployment rate in Japan came out last week with the highest level in five years. Last week the yen was lower by 56 ticks, it’s first negative week in the last four weeks. Support comes in at the 20 day moving average at 1.0370 with resistance at 1.0525. If equities continue lower don’t rule out a trade over 1.06. Aggressive traders could purchase September 110 calls for $1,000 with an objective of $1,500.

The Kiwi was lower by 153 ticks with the short term trend clearly turning lower. Resistance is seen at .6370/6390 with support at .6200 followed by .6125. 

The US dollar index gained 62 ticks last week closing just above the 20 day moving average. Support comes in at 79.80 resistance at 81.25. We’re expecting a trade up to 82.00 and although we may not trade the dollar most markets will be affected on that move.

The USDA reported 87.03 million acres of corn were planted, much more than expected. 87.03 million acres would be the second largest planting since 1946. September corn closed down 44 ¾ cents on the week, the lowest close in nearly seven months with good growing weather in the Mid-west and the curveball from the USDA.  Support is seen at the contract low at 3.35 ¾ with resistance between 3.55/3.60. We have no exposure with clients as we were stopped out of their September and December corn last week at a loss. December $4 corn calls are on our radar, stay tuned.

The USDA reported 77.48 million acres of soybeans were planted, less than expected, but a new record high. November soybeans gained 21 cents last week but the real story was the reversal after the market digested the acreage report. Last week’s trading range was 85 ¾ cents so tread lightly. Support is currently seen at 9.80 with resistance at the 20 & 40 day moving average at 10.25.

The USDA reported 59.78 million acres of wheat were planted, slightly more than expected. September CBOT wheat was lower by 33 cents trading to the lowest level in 09’. Support comes in at last week’s low at 5.25 with resistance at 5.42 followed by 5.54. September KCBOT wheat was lower by 33 ¼ cents last week. Support is seen at 5.55 followed by 5.45 with resistance at 5.72/5.75.

October sugar jumped up 31 ticks to a new contract high. We may be wrong but for now are convinced an interim top was made last week at 18.09. Being that prices are overbought and appear to be rolling over we have advised clients to step to the sidelines temporarily. A 50% retracement would take prices to 16.83, the 50 day moving average comes in at 16.27. We will be advising futures and options in March 10’ on a setback.

The USDA reported 9.05 million acres of cotton were planted, down 4% from a year ago, but more than the 8.81 million acres in the USDA’s June report. Whatever spin one wants to put on this, it will be the smallest cotton crop since 1983 so if we do see a resumption of demand, prices would react bullishly. October cotton closed up 4.18 cents; the first close above the 50 day moving average in three weeks. Support comes in at 57.00 with resistance at 60.00 followed by 62.00.  A December 60/65 bull call spread is a buy for under $1,000.

September cocoa was lower by $66 last week. Support comes in at 2460, resistance at 2580. We’re still crunching numbers to see if a back spread selling September and buying December makes sense.

September orange juice was higher by 3.05 cents last week on a hook reversal with good volume. This was the first positive week in the last five. Support is seen at 77.25/78 with resistance at 82/82.50. The November $1 calls settled last Friday at $428/per, continue to add these to your commodity portfolio.

September coffee was lower by 1.20 cents last week failing to make its way above the 9 day moving average. Support comes in at 115/116 with resistance at 120.50/121.50. We currently own December 130/145 call spreads for our clients thinking the recent sell-off was overdone. The inventories of several producing countries are at dangerously low levels so it would not take much to get this market moving. Perhaps a frost scare or drought could be the catalyst?

August gold traded lower by $8.20 last week to form an inside week. This is not the most bullish news and if the dollar was to continue its push upward we could see further consolidation. Being that prices are now below the 50 and 100 day moving average I would like to see consecutive closes back above those levels before getting considerable long exposure for clients. Support is first seen at 914/918 followed by 900 with resistance at 942/950. On 2 consecutive closes above 950 that should signal prices are on their way to 1000, which we do expect in Q3. Our favored play remains October $100 call spreads.

September silver lost 67.5 cents last week and has now closed lower for the fifth consecutive week losing 17% in that time frame. Last week’s low at 13.29 will offer mild support but on a breach of that level expect another $1 move south. Resistance comes in at the 100 day moving average at 13.65 followed by the 50 day moving average at 14.20. We will continue to accumulate $3 December call spreads for clients, however we would advise lightening up on futures until a bottom is confirmed.

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.

By: Matthew Bradbard

At this point I’m not sure whether the global recovery has begun or this is just a head fake, who will win the tug of war between inflation and deflation, if Treasuries are the next bubble, if the buying from China is sustainable or when interest rates will be increased. All good questions and heated debates but what really matters is what is working, being agile and spotting opportunities where the risk/reward dynamic makes sense both long & short in commodities is what seems to be working.

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 down 3.8 million barrels last week, supplies of gasoline were up 3.9 million barrels while heating oil supplies were down 100,000 barrels. August crude oil finished lower by $1.04 last week. On the weekly chart a bearish engulfing candle formed, if confirmed expect more downside. Continue to use a trade above $72 or below $67 to determine the next leg. Our clients will most likely be buyers between $62 and $65. August RBOB was lower by just over 4 ½ cents as prices are 22 cents off their highs from just 2 weeks ago. Use 1.8150/1.8300 as support with resistance coming in between 1.92/1.9350. If crude falters expect a trade down to 1.70/1.75; the 50 day moving average comes in at 1.7585. August heating oil retreated just over 4 ½ cents as well. Resistance is seen at 1.85 support at 1.75, the 50 day moving average in heating oil is at 1.6470. Crude and both product were down the last 2 weeks, what will this week bring?

The DOE reported underground supplies of natural gas were up 94 billion cubic feet last week to 2.020 trillion cubic feet. Supplies are now up 31% from a year ago. August natural gas was down 8 cents but did manage to close just over the 50 day moving average. Support is seen at 3.85 with resistance at 4.15 followed by the 100 day moving average at 4.27. We continue to accumulate October $5/6 call spreads for clients.

August live cattle traded higher by 10 ticks last week making their way to positive ground now three weeks running. We maintain that an interim bottom was made three weeks ago and since prices have moved 4% off their lows. We are still holding the long August live cattle/short October live cattle spread for clients expecting the spread to come in. Support at 81.60/81.80 with resistance at 82.90 followed by 83.50. August feeder cattle were higher by 72 ticks last week and in three weeks we’ve gone from oversold to overbought. Resistance is seen at 99.90 with support between 97.80/98.00.

The USDA reported there were 66.08 million hogs and pigs in the US on June 1st, down 2.0% from a year ago, roughly as expected. 5.97 million lean hogs were kept for breeding, down 2.7% from a year ago and less than expected. August lean hogs fell 3.80 last week or 6% to a new contract low. Currently some clients are short August futures and long (2) August 62 calls. There is little to no support on the daily chart, resistance comes in at 59.50.

Stocks: The Dow ended the week lower by just over 100 points to close at 8438. The S&P slid ever so slightly closing at 919. The NASDAQ was the only winner climbing 11 points to 1838. Volumes remain light on all exchanges and as we have voiced we feel a correction is underway. From here the pivot point appears to be the 50 day moving average; for the Dow at 8335 and the S&P at 898. From the highs three weeks ago the Dow has come off 5% and the S&P 4%, so if we’re due for a 10-15% correction more should follow. Remain nimble but we are selling rallies for clients.

Bonds:  The Federal Reserve concluded its two day meeting keeping the rates unchanged at 0 /0.25%, as expected. They stated economic conditions are likely to warrant exceptionally low levels for an extended period. As of last Friday, fed funds were forecasting a 57% chance of a rate increase by year’s end as compared to 96% a week earlier. September 30-yr bonds were higher by 3’18 points, their largest weekly gain in 14 weeks. Our objective of 120’00 is now within our sites. Resistance is seen at 120’14 with support at 117’16. September 10-yr notes were 1 tick shy of advancing 2 points. Prices have made their way to the 50% Fibonacci retracement level in the last 2 ½ weeks after a sizeable sell-off that started in mid May. Resistance comes in just above 117’00 with support at 115’20. March 10’ Euro-dollars were higher by 22.5 ticks last week, which would be against our current shorts for clients. Continue to scale into short futures or buy puts as the interest rate expectations may have shifted temporality allowing a better entry for would be short sellers. On the agenda this week, how will California deal with their obligations?

Not garnering a lot of media attention but again talk surfaced from China, they would like to see a new international currency and more involvement from the IMF. Currently this is just conjecture but if this was to be considered the dollar would get smoked.

The Euro was higher by 133 ticks last week closing above 1.40, four out of the last six weeks. Resistance is seen at 1.4125/1.4150 with support at 1.3900 followed by 1.3750. One of our top performing CTA’s is long, we have no exposure with our clients outside of that CTA. ECB President Trichet said there has been enough of a stimulus and he doesn’t want to see governments increase their debt any further.

The Aussie traded higher by 34 ticks closing just above the 20 day moving average. Support comes in between .7850/.7875 with resistance at .8060 followed by .8160.

The Swissie was lower by only 12 ticks last week recovering substantially after intervention by their Central bank. After the 276 tick loss last Tuesday we were buyers of July 93 cent calls and we were able to liquidate Friday for a 30% net profit for clients, see blogs from last week. Support is seen at .9100; the 38.2% Fibonacci retracement level with resistance at .9300 followed by .9400.

The Loonie lost 139 ticks last week closing lower three out of the last 4 weeks. Support comes in at last week’s low at .8596 with resistance at .8770 followed by the 20 day moving average at .8884. We may explore September 89 cent calls and/or 85/90 call spreads for clients. Our decision will be based on what we see in energies and metals early in the week.

The Cable was higher by 29 ticks last week. 1.66/1.6650 should continue to act as resistance with support at the 20 day moving average at 1.6370 followed by 1.6175.

The yen gained 116 ticks last week making last week the third consecutive positive week. Support comes in at the 20 day moving average at 1.0360 while resistance is seen at last week’s high at 1.0551 followed by 1.0650.

The Kiwi was higher by 47 ticks producing positive returns four out of five sessions last week. Support is at the 20 day moving average at .6334 while resistance comes in at .6470 followed by .6550.

The US dollar index was lower by 52 ticks last week. 80.00 has served as a magnet of late with prices not straying too far in either direction. Support comes in at 79.60 with resistance is at 81.00. Prices could go either way, we have a bearish bias but a good friend who trades almost exclusively currencies feels that the mother of all short squeezes is coming, so be cautious.

Analyst expect corn acres to drop to 84.2 million, a drop of 1%. Soybean acreage is expected to rise 3% to 78.3 million and wheat is expected to fall 0.5% to 58.3 million. Compared to last year with corn at 86.0 million, 75.7 million for soybeans and 63.1 million for wheat.

July corn was lower by 11 ¾ cents last week as we have gotten the break we’ve been calling for. We will be positioned long into Tuesday’s USDA report on behalf of clients. Trade ideas: long December with stops below $3.95 or long September while simultaneously selling multiple out of the money calls against the futures. In the July contract support is seen at 3.80, resistance at 3.90 followed by 4.00. The fact that the $4 level held on the December 09’contract after multiple selling attempts should bode well for the bulls in coming weeks. The immediate key will be the reaction to the report and then focus will move to the weather.

July soybeans were higher by 17 cents last week, trading higher four out of the five sessions. After a $1.40 correction it may be time for a bounce, much like corn it will depend on Tuesday’s USDA report and the weather. November beans came within ¼ cent of our $9.70 target we had been calling for several weeks, so aggressive traders can start scaling into new crop futures. Make sure you have stop loss orders in place!

July CBOT wheat was lower by 20 ¾ cents last week. July KCBOT wheat was lower by 24 ¾. Both these contracts have lost over 20% from the first of June taking prices to extremely oversold levels. Aggressive traders could get long September with stops below last week’s lows, CBOT at 5.55’6, KCBOT at 5.97. Wheat generally sees harvest lows in June, creating a good seasonal long trade. Entering long positions in early June and holding into November has worked 32 out of the last 40 years. We didn’t bring this trade up earlier because the chart was horrible and now it’s not. Past performance is not indicative of future results.

October sugar ended up 127 ticks or 8% higher on the week, trading to a new contract high; the highest levels since July 06’. Very few commodity traders or investors for that matter follow sugar, but meanwhile prices in the last 3 months have quietly gained 35%. Resistance is seen at last week’s high at 17.75 with support at 16.90 where the breakout occurred. We liquidated all client longs last week taking money off the table and will be adding fresh longs in March 10’ on a setback.

September cocoa was higher by $43 last week but it was a wild week with a trading range of $168 H/L. Read our blogs from last week to see a futures trade that netted clients $600/per overnight. Until a decision on direction is made in the US dollar expect volatility. Resistance comes in at 2570 followed by 2630 with support at 2470. Cocoa may be a good back spread candidate as we may look to sell October and buy December for clients.

October cotton was higher by 59 ticks last week and after three failed attempts to get through the 100 day moving average on the downside prices may well rally. A smaller crop is a foregone conclusion, but regardless confirmation from the USDA Tuesday may be a market mover. Support comes in at the 100 day moving average at 53.15 with resistance at the 50 day moving average at 57.45. The daily chart is starting to look better but the weekly chart is still ugly. We have no exposure with clients currently.

September orange juice was lower by 3.90 cents back to levels not seen since mid-March. Prices are awfully oversold as they have moved lower 19 out of the last 21 sessions. Although it has been a one way trade we are still advising clients to buy November $1 calls. We initially paid $540 per, as of Fridays close their value was $322.50 each, buy more.

September coffee gave up 50 ticks last week closing lower for the last four weeks taking price 18% off their recent highs. Support comes in at last week’s low at 117.55 with resistance at 121.50 followed by the 100 day moving average at 123.10. The December 130/150 call spreads are on our radar but we’ve yet to commit any client funds, Friday settlement was approximately $1450/per.

August gold closed up $5.90 last week supported by the expectations that the world’s low interest rate climate will continue, at least through the end of this year. On the weekly chart a bullish engulfing candle was formed. Support comes in at the 50 & 100 day moving averages that both sit just above $930. If $930 was breached we would expect $915 to hold. Resistance is first seen at $950 followed by $967. To gain exposure for clients currently we’re advising $100 call spreads in October.

September silver was lower by 6 cents last week which is not a big deal but it did mark the fourth consecutive negative week. By week’s end silver did start to show some life though closing 52 cents off the weekly lows. We continue to position clients in $3 December call spreads paying between $2-3,000 per spread. Support is seen at the 100 day moving average at $13.63 while resistance comes in at $14.35/14.45 followed by $15.

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.