We will return Tuesday after the long weekend expecting to see the majority of commodities higher…time will tell.
Oil should close about 10% off its lows this week. We expect more upside to come in the weeks to come in Crude, RBOB and heating oil. Some of our clients are back into natural gas; buying September 50 cent call spreads today. We will remain flexible on this position but want to have light exposure to play a potential move to $4.75/5.00 in the coming weeks. As long as prices in the indices sty above the 200 day MA we continue to think we will get a rally out of here.
We’ve advised clients that we will be looking to be a seller between 1125-1145 in the S&P.
Sugar was off by nearly 5% today; clients remain long willing to ride this a bit lower before throwing in the towel. Most are long October futures and short calls against their futures.
Cotton closed lower all five sessions this week; on a trade below 79.50 we expect 77.50.
We advised clients to book a profit on their short 30-yr bonds today. We are shy of our objective but chose not to hold the position over the long weekend. Euro-dollars will close down on the week but until we get a settlement below the 20 day MA we would not get too excited about the downside. Those traders with a long term horizon are advised to have short exposure but do not pile in just yet.
Clients need more downside ideally next week to exit their shorts in lean hogs. December live cattle gave back all their gains from yesterday today closing down 1.21%. Clients started buying yesterday and will likely be adding to their longs next week.
If $1200 continues to support gold we may reluctantly be a buyer next week for clients…stay tuned. Silver was higher by 2.7% this week closing just above the 20 day MA today. Clients are long via futures and options as we expect a trade above $19 in the coming weeks.
Funds were sellers of agriculture today doing some month end window dressing. We suggest using this set back to be a buyer of corn, soybeans and soy meal.
Clients remain long the Loonie and Pound into next week expecting more upside.
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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