Today in Commodities: New Opportunities

Oil is down for the fifth day in a row, on a trade below $62 we should see a test of $60. We had recently entertained picking a bottom and getting long on a setback… cancel that. Catching a falling knife in crude oil is too dangerous at this juncture. If you must have exposure in the energies sector, we still like October $1 call spreads in natural gas. Do not dive in head first but rather gain light exposure and look to add to the position once the market proves you right.

Until the dollar determines a direction, we would rather be scalping in currencies looking for quick moves, if that is your fancy as opposed to any position trades. If you did get long the Loonie or Yen on our rec’s early this week, tighten up stops or take a profit.

March 10′ 99.00 puts in the euro-dollar were bought for clients today at $700/per. Equity markets heading lower, hope you are hedged or short. You could see another 40 points in the S&P and 500 in the Dow on this leg.

Corn was lower by 2.5% today with soybeans losing 5.5-7.0%. We advised clients to buy December $4 corn calls today, filed today at 12 1/2 cents; $625. I know a broken record… buy October $100 call spreads in gold and December $3 call spreads in silver. If you are long the November $1 oj calls we’ve been recommending put in a limit at 700 points or $1050/per on 75% of your position.

Comments

[Windsun33:]

Seems to me that commodities in general are oversold - at least I hope so - I bought a few hundred shares in the sector ETF's today..

Jul 07 04:41 PM

[2Labradors:]

Im looking into some call spreads on some of the commodity stocks here at this level. Notably on coal stocks such as MEE, FCX, and even SLV

Jul 07 08:27 PM

[El rosarino:]

I am considering DBA....
sailingmarkets.blogspo...

Jul 07 10:25 PM

[Maxe Paul:]

Read my latest blog post for an update on China and commodities going forward.

Jul 08 03:44 AM

[Kurosaki:]

Oil
Minimum projection is $50 and all commodities remain in a downtrend, hold all shorts

Jul 08 05:27 PM

[abc123:]

what i don't understand - you're wanting to own dec09 $4 corn calls? I don't know what the technicals are saying, but fundamentals are bearish. With the recent USDA WASDE Report showing higher than expected corn plantings. Are you basing a bull move on expected harvested acres combined with a lack luster yield? Still then we are looking at a comfortable ending stocks value. What's the logic behind your recommendation?

Jul 14 11:46 PM