MBWealth's Commodity Blog » corn

Building on Strength 2/7/11

Matthew Bradbard — Tue, 07 Feb 2012 20:55:37 +0000

Metals, stocks and even foreign currencies continue to build on strength as 2012 has virtually been a one way trade…will this continue? Crude oil erased the previous week’s losses adding 1.9% today but failed to close above $99 in March. I view that level as the pivot point so I remain bearish still. Be willing to cut loses on any shorts if prices trade through that level in the coming sessions. Natural gas continues to bounce around and I would suggest no long or short trades until we get a clearer picture. A fresh 2012 high with equities gaining 0.50% today. The 9 day MA continues to act as my pivot point and although we’re approaching overbought levels I learned a long time ago not to jump in front of a freight train. Positive news out of Europe with progress being made caused the Euro to jump and other crosses to follow. Clearly wherever the Euro goes other currencies will follow and at the moment that looks like higher ground. It also helped that the US dollar fell to a two month low. Gold and silver reversed early in the AM to go from negative to positive with gold and silver gaining 1.4% as of this post. Prices may try to visit the recent highs but I have not seen enough of a correction to justify further upside. I am still looking for a move under $1700/ounce in the June contract. March silver is back above $34/ounce but like gold I feel we have more of a break before any serious advance. If you notice in this complex gold, silver and copper seem to be consolidating …the debate is if the market is taking a breath for additional upside or preparing for a reversal? OJ lost nearly 3% closing below $2 for the first time in three weeks…expect further losses as the 50 day MA may come into play. That level is $1.83 in March. Continue to use the 20 day MA as your pivot point in Treasuries as 10-yr notes and 30-yr bonds closed below that level today. Traders can gain bearish exposure in 2013 Euro-dollars with stops above the recent highs. The suggested play would be to build a position on the way down while trailing stops. Ag prices appear to be stalling unable to hold onto gains across the complex. Most traders are likely waiting for Thursday’s USDA report and will make a move based on the numbers. Any longs should be trailing stops and it may be prudent to book profits and be in a cash position headed into the USDA report. April live cattle continue to wander between $1.27 and 1.29 trading higher back up near the top of that range today. I am suggesting buying a break closer to $1.25. Let lean hogs work lower as well as my target in April is a buy closer to 86 cents…trade accordingly.

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

Protected: The Line in the Sand February 06, 2012

Matthew Bradbard — Mon, 06 Feb 2012 22:08:39 +0000

Protected: The Line in the Sand January 30, 2012

Matthew Bradbard — Sun, 29 Jan 2012 17:30:41 +0000

Protected: The Line in the Sand January 23, 2012

Matthew Bradbard — Sun, 22 Jan 2012 17:38:46 +0000

Tortoise or Hare 1/18/12

Matthew Bradbard — Wed, 18 Jan 2012 21:51:06 +0000

Every investor has a different strategy but slow and steady sometime wins the race. The idea is to be consistent and take small losses and let profits run…easier said than done. For three weeks now Crude has been stuck in a $5 trading range and this looks to continue. Today prices reversed mid-day to close slightly higher back above the 9 day MA above $101/ barrel in March. The sidelines is my suggestion until we get a clearer picture. A close below $98.50 or above $102.50 would likely set the tone in that direction but until then sit on your hands. We’re getting mixed signals from the distillates which is supporting sideways action in Crude with RBOB inching higher gaining over 2% today while heating oil closed lower for the fifth straight session. No new lows today but still waiting for a bottom in natural gas and believe it or not I am hearing whispers of $1.00 handle…stay tuned. Equities bounced off the 9 day MA today and closed higher by approximately 1% depending on the exchange. Ytd stocks are off to a healthy start appreciating just over 2%. Expect the grind higher to continue, using the 9 day MA as your pivot point on a closing basis. Gold and silver closed above their respective 40 day MA’s. My next target remains the 50 day MA which in February gold comes in at $1678 and in March silver at $31.16. On the daily chart prices are overbought so if we start to turn south have an exit strategy to book profits on longs because as we all know metals can change course quickly. Copper is nearing a three month high and if prices surge above $3.80 the next stop would likely be $4/lb., a level not seen in nearly five months…stay tuned. Day three of a dollar setback and the first settlement below the 20 day MA in two weeks. An interim top may be in so stay tuned … a close below 80.45 in March I would turn bearish. The standouts today were the European currencies…expect that to continue on further dollar weakness. The Euro, Pound and Swissie can be bought with tight stops. Cocoa needs to re-take the 50 day MA in the next few sessions or I would take remaining longs off. That level is 2295 in the March contract. Treasuries were lower today but until we see consecutive closes under the 20 day MA in both 30-yr bonds and 10-yr notes considering it just a trading range and I have no long or short interest. Those levels are 143’22 in 30-yr bonds and 130’25 in 10-yr notes. Fresh lows in corn and wheat as we may make an attempt at the December lows while soybeans were able to tread water today. On a lower trade that holds the December support I will look to be a buyer of Ag for clients…stay tuned. Not my favorite trade but if long live cattle place stop just below the 20 day MA and let the market guide you. Lena hogs have picked up ground the last four sessions. As I’ve voiced I think this is the beginning of the next leg higher. Lean hogs are not making headlines but we could see a nice appreciation in the weeks to come…this fits the bill for a good swing trade.

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

Back to Work 1/17/12

Matthew Bradbard — Tue, 17 Jan 2012 20:41:25 +0000

After a long weekend the markets are back to normal trading hours. Crude will finish just shy of 2% higher but will not retake the 9 day MA; in March at $101.25. I have advised the sidelines thinking we remain in the $10 range and do no wish to establish a position being we started the day near the middle of the range. Multi-year lows in natural gas with prices down near 7% today. This makes it five losing sessions in a row with no bottom in site. Equities inch higher as the 9 day MA continues to support. Use that level as your pivot point; in the March Dow at 12370 and the S&P at 1282. Gold traded above the 40 day MA again today closing just under that mark. I’m expecting a further leg higher and this would be accelerated if the dollar was to back off. I see support at $1635 in February as our upside target remains $1680…trade accordingly. Support is seen in silver just above $29 in March with an upside target of $32. The big mover today was copper breaking resistance and advancing to four month highs. This was likely from the continued growth out of China. Q4 GDP coming in just under 9% is certainly nothing to sneeze at. The dollar is exhibiting signs of fatigue but I would like to see a settlement below the 20 day MA before getting too committed . That level is 80.90 in the March contract…trade accordingly. Aggressive traders could buy the Euro or short the Yen with tight stops. Both trades are a slight forces so I would hold off for confirmation. Cotton closed above the 100 day MA for the first time in seven months…take off all bearish trades at a loss. For nine sessions Euro-dollars have picked up steam. There will be a time to get short but until we see signs of an interim top let the market work higher. I am still looking for signs of a bottom before reestablishing longs for clients in any of the Ag markets. I believe we have a shot of seeing the December lows challenged so be patient. Livestock traders could be back long April live cattle and lean hogs with stops just under the 20 day MA. I like the prospect of higher hog prices and the technicals appear a little less risky in my opinion.

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

Protected: The Line in the Sand January 16, 2012

Matthew Bradbard — Sun, 15 Jan 2012 22:13:55 +0000

Commodity Grind 1/12/11

Matthew Bradbard — Thu, 12 Jan 2012 21:05:58 +0000

There were little to no big movers just the status qou. Crude turned down today trading down over 2% as of this post. If we see a settlement below $100 I will turn bearish. Next support is seen at $98 followed by $93 on the February contract. Natural gas gave up another 2% today taking prices below $2.70. I never thought we would see this much downside but most of my clients are ready to leave the trade so my gut tells me we’re close to a turning point. The lows from 2 1/1 years ago are still 30 cents lower and at this juncture I cannot rule out a test. After testing the 9 day MA equities crept higher. Look for the grind higher to continue…1300 in the S&P and 12700 in the Dow look like likely targets. Gold hit the 40 day MA but backed off by the close. I am targeting the 50 day MA which in the February contract is $1684. Silver also hit the 40 day MA closing higher by 0.90%. On this leg I anticipate another 3-4% appreciation. The US dollar is manic erasing previous day’s gains closing back in on the 20 day MA. Use that level as your pivot point, in March at 80.80. On continued green back weakness expect the Swissie and Euro to outperform. Aggressive traders can sell cotton with stops above the 100 day AM. A level that has rejected further upside several times in recent months. In fact March has not settled above that level since mid-June of 2011. Day two of the OJ correction with prices down limit today . The bubble has burst and more downside is expected…trade accordingly. Treasuries could go either way..walk away for now. Let the Euro-dollar work higher and then establish bearish trades from higher levels in 2013 contracts. A bearish USDA report and markets reacted with the front month of corn down 6%, soybeans lose near 2% and wheat 6%. Further downside is expected in this complex and if prices approach the November/December lows and hold I will be looking for a buying opportunity…stay tuned. Lean hogs tested and held support so on further base building I may re-explore longs for clients.

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

The Line in the Sand January 09, 2012

Matthew Bradbard — Sun, 08 Jan 2012 16:04:41 +0000

Please click on the spreadsheet to view, zoom to 100% if needed. The Line in the Sand format has changed, you will be receiving the chart on technical analysis Monday mornings. Please visit Matthew’s Daily Thought for your market wrap ups and predictions. In addition he will be posting a new article per week, you can find those in Published Articles. If you subscribe to our Feed, you will be notified when new posts are available. If you ever have any questions about The Line in the Sand or any other post, you may contact us for any reason.

Traders Market 1/5/12

Matthew Bradbard — Thu, 05 Jan 2012 21:35:33 +0000

The impressive start to the year in both stocks and commodities is coming into question as some big movers start to retrace. The message is clear 2012 like previous years will likely be a traders market NOT buy and hold. Crude failed at its highs and by day’s end reversed to trade down nearly 2%. I’ve suggested clients to take off their positions and move to the sidelines. It would take a settlement back under $100 for me to gain bearish exposure again for aggressive clients. Natural gas erased al of yesterday’s gains taking prices back near their lows. Just when I thought longs were out of the woods…very frustrating. On a new low expect follow through so do not get a large position on if you are willing to weather this. Stocks found support at the 9 day MA closing near the upper end of their trading range. We are still expecting a further grind higher but tomorrow’s action should be influenced by the jobs number in my opinion. Gold continues to climb higher as I feel we’ve seen about half of the current leg play out, February target $1680. Same comments on silver as yesterday the market appears to be taking a breath before the leg higher resumes, March target $32. The 20 day MA supported the dollar today as prices raced 1% higher lifting prices near contract highs. Though we expect a trade back to 79.00 in March on a new high we would cancel that idea thinking momentum could lift prices near 83.00. Stay alert because an upside dollar breakout would likely lead to lower trade on other crosses. We’re getting mixed signals and suggest being nimble trading both sides and implementing tight stops because there is no clear trend in forex currently with the exception of the Euro and Swiss which should continue down. In full disclosure I recently voiced a bullish trade to no avail. Sell signals in coffee and sugar today…aggressive traders could gain bearish exposure. Continue to use the 20 day MA in Treasuries as your pivot point. Hopefully grain traders booked profits on their longs as price action appears to be reversing. Corn lost 2.28% today with wheat down 3.2% and soybeans off 1.7%. We anticipate further downside in the immediate future…trade accordingly. Continue to fade rallies in live cattle targeting a trade under 119.00 in February. Take longs off in lean hogs… most traders should be at break even or a slight profit depending on their entry.

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