The risk aversion trade is ON. What does that mean? The US dollar should rally as well as the yen… what does that mean? We advised clients to get long the yen today, bought September 110 calls. At 107 in the futures should be worth $1100/ per, at 108 $1400/ per. Bullish engulfing candle in the dollar today and the yen probed back above the 20 day moving average, look for a close above that level next few days.
We cautioned longs in crude to be careful as yesterday may serve as an interim top. This will depend on the inventory report tomorrow. Natural gas was lower by 2% today, we still like buying October and November $1 call spreads for clients.
Stay long December corn, but be patient; it may take several weeks for this trade to develop. One of our most successful CTAs has had a tough time of late put on a bullish play in December soy meal and it looks like available play… we may follow.
The action in gold and silver today should confirm why we advised traders to lighten up, and we are thankful most of our clients listened. We put on NOB spreads for clients today; buying 30-yr bonds and selling 10-yr notes expecting bonds to gain on notes. Lean hogs were lower by nearly 4%, which stings a bit because we lifted shorts yesterday…can’t be in 'em all. Cocoa continues to exhibit signs of a top, remain short. Coffee was hit pretty good today but we advised clients to hold being they have 107 days till expiration.
