Commodities Today: A Traders' Market

The 100-day moving average in crude oil remains the line in the sand, in August at $58.82. We feel we’re getting close to an interim bottom but will remain on the sidelines until a bottom is confirmed. Natural gas is basing out for the last 3 days, the trading range has been 15 cents. Buy October $1 call spreads right here and sit on you hands for the next 5-8 weeks. Risk/reward on the trade, expect to pay approx. $2,000 per spread with a max target of $8,000 profit. We may be wrong on the trade, but would anyone question the trade as an investor taking a trade with a 4:1 risk/reward?

The story remains much of the same, the dollar and yen do one thing and the other currencies do the opposite. We have no recommended currency trades at the moment.

The stock market looks lower into next week but be careful of bank earnings next week. Not that I trust the numbers, but we could see a rally on cooked books. Trail stops down on shorts or lighten up. Short March 10′ Euro-dollars via options and futures.

We were buyers of December $4 calls for clients in corn today, filled at $487.50/per. Being long for clients in gold and silver of late has been somewhat painful, though trading the spreads has eased the pain. We advised clients to buy back the top leg of their spreads in December silver today. We made a modest attempt at the 200 day moving average in silver today, on September silver we got within 6 cents on the lows. That is close enough for me! Buy December $3 call spreads, we we’re filled today on $14/17 at $2,150 for clients.

Livestock was a non-event, though we did put in GTC limits to exit put spreads for clients. Our objectives were met on orange juice today, the options we had been reccomending for the last three weeks were taken off at a tidy profit today. We took 80% of our clients positions off and will gamble with the rest looking for the big move.

Comments

[one eye:]

Good Golly Miss Molly.

Mad Hedge has developed a New comment which is now gracing multiple Articles.

Jul 12 06:10 AM

[PoopInPant 44:]

Other than a technical bounce, are there many fundamental issues that could cause a significant bounce at the $58.82 mark?

Jul 13 01:20 AM

[E-Rsch:]

Would knowing what the 5D, 50D, 100D moving averages will be for front month contracts be useful for trading energy ETF's? Can you trade off of the front month futures for the same commodity? What would knowing how large (or bad) these moves in front month futures contract prices can swing be beneficial to traders? Thank you!

Jul 13 09:05 AM