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US dollar continues to crumble. Remember: US dollar down should = commodities up. Typically… but this is not always the case. As we’ve been suggesting, we could get a snap back in the dollar. This is not meant to be a trade recommendation but rather a cautionary warning. If the dollar temporarily rallies, make sure you are not too long commodities.

We suggested for clients to take off the remainder of their silver longs. They have now exited gold and silver and will wait for a pullback to get re-positioned long again. Stay tuned. At this moment we feel that closer to $960 in the gold and $15 in the silver we will be interested once again. Could our clients miss more upside? Yes, that is entirely possible.

Fifth positive day in equities, our clients are missing that one… we prefer the sidelines.

We attempted a cocoa short in the futures and got stopped at a loss of approx. $400/per today for clients. Sugar was a gainer of almost 4% today, are you positioned long yet? Keep your profit orders in on the coffee, we have a order at 400 O/B ($1500) to exit the December 09′ / March 10′ strategy from last week.

Aren’t you glad you lifted the 10-yr note put protection, clients remain long December 30-yr bonds…see previous posts. Euro-dollars were slightly higher, that is ok, this is a long term position trade. We bought March 10′ $3.60 corn calls for clients today. We see 3 things that COULD help this trade: an early frost or a perceived reduction in yield, large exports on a weaker dollar or a surprise from the USDA tomorrow. Still looking for a touch more profits on the December lean hogs. Tomorrow will be key. Use minor setbacks in live cattle to add to your longs. We rolled spreads for clients today and they are now long February 10′ and short April 10′.

Crude oil is slowly marching higher, we suggest long exposure. Natural gas…15% higher today!

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