Today in Commodities: Quarterly Window Dressing

2009 is 3/4 over -- how is your performance? You’ve had to pick your points in commodities, but for the most part wheat, coffee, OJ, commodity, futures, art, being long currencies against the US dollar and long metals have been the plays.

We’ve had success as well in the softs, i.e. sugar, OJ, and coffee. We feel the big swing today is window dressing with fund managers picking winners so they show exposure in the 3rd quarter… maybe we're wrong and it is just the fundamentals finally kicking in??

Oil was higher by 5% today on good volumes. We are positioned long with clients looking for $74 and perhaps $76 on this leg. Call spreads in March coffee and January OJ we feel are buys. Sugar is very impressive, we will look to get re-positioned long with clients again on intra-day setbacks.

The stock market action was peculiar, we still like being short as long as 1075 in the S&P and 9800 are not penetrated on rallies. We advised clients to take a smaller profit on their long in 30-yr bonds.

Impressive close in the grains, buying wheat, corn, or soybeans on setbacks is okay with me. There is no need to be in all as they tend to move together.

Gold and silver were higher and we are short silver with clients and on the sidelines in gold. We maintain that prices should move lower and will refrain from being sucked long with clients for now. If we change our minds we will tell you and cut losses on silver shorts.

A complete reversal in live cattle formed a bullish engulfing candle. McVean was a big buyer of calls as well as JP Morgan, we hear. Trust me, cattle traders want to be on the same side as MCVean (google him/ Charlie McVean). We are advising outright calls in December and February.

The US dollar leaked today, let's wait til’ tomorrow before taking any action. We remain short Euro-currency and long yen for clients, though on a trade near 113 in the yen we would advise booking profits.

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

Comments

[bmartasin:]

Good luck with those silver shorts Matt. I been getting crushed on silver miner puts. I don't think it's going to be a successful trade for you/we'll be hearing about you cutting your losses soon.

Sep 30 06:13 PM

[TonyNed:]

The dollar looks close to reversing to move lower which should feed oil's reversal which began today as well. They both look like they are at the end of their moves per several indicators. The SLV looks like it's going to run up for awhile. Shorting Silver may not be well timed.

Watch the railroad stocks, they are extremely oversold..

Sep 30 09:33 PM

[Dr. O:]

I like silver here. Nice upwardly trending chart combined with a down trending US Dollar. Throw in a growing lack of confidence in US fiscal and governmental policy, terrorism, war, and Iran, and you can see why the metals may continue to have a bid.

Sep 30 10:06 PM

[bmartasin:]

Add to the list that a lot of people have been calling for a correction in the metals (along with the stock market), which is another great reason why they will continue to go higher.


On Sep 30 10:06 PM Dr. O wrote:

> I like silver here. Nice upwardly trending chart combined with a
> down trending US Dollar. Throw in a growing lack of confidence in
> US fiscal and governmental policy, terrorism, war, and Iran, and
> you can see why the metals may continue to have a bid.

Sep 30 11:13 PM

[bmartasin:]

Add to the list that a lot of people have been calling for a correction in the metals (along with the stock market), which is another great reason why they will continue to go higher.


On Sep 30 10:06 PM Dr. O wrote:

> I like silver here. Nice upwardly trending chart combined with a
> down trending US Dollar. Throw in a growing lack of confidence in
> US fiscal and governmental policy, terrorism, war, and Iran, and
> you can see why the metals may continue to have a bid.

Sep 30 11:14 PM

[Matthew Bra...:]

1st paragraph should read...

2009 is 3/4 over -- how is your performance? You’ve had to pick your points in commodities, but for the most part being long currencies against the US dollar and long metals have been the plays. NOT

2009 is 3/4 over -- how is your performance? You’ve had to pick your points in commodities, but for the most part wheat, coffee, OJ, commodity, futures, art, being long currencies against the US dollar and long metals have been the plays.

Oct 01 08:25 AM

[Burticus:]

I am not a trader/analyst, only a humble country CPA who can read a map.

Rode oil from about 42 down, then back up to 66 this year where I snatched my chips off the table. Double long ETF did not perform as well as WTIC, which limited my gain.

Made a 1:1 leveraged side bet on silver in January at around 11.61 and still holding as of the Sept 30 close at 16.62 for a gain of 5 FRNs per ounce or 43%. Not a bad gain, but still sticking with my plan, waiting for the price explosion as the central banksters hasten the FRN's death march to the fiat graveyard then fiat Hell.

Accordingly, I must agree with the author that these were good plays.

Short silver?! Though there could be a dip, no way would I risk being short on October 25, when Israel is scheduled to attack Iran, which will also serve to distract from the currency vaporization from November into 2010.

Oct 01 12:55 PM

[bmartasin:]

LOL Israel SCHEDULED to attack Iran on 10/25. Yep, it's on their calendar! What a ludicrous statement buddy. I'de bet my stack of silver your full of SH!T


On Oct 01 12:55 PM Burticus wrote:

>
> Short silver?! Though there could be a dip, no way would I risk
> being short on October 25, when Israel is scheduled to attack Iran,
> which will also serve to distract from the currency vaporization
> from November into 2010.

Oct 01 09:43 PM

[Dr. O:]

>>Gold and silver were higher and we are short silver with clients and on the sidelines in gold. We maintain that prices should move lower and will refrain from being sucked long with clients for now. If we change our minds we will tell you and cut losses on silver shorts.<<

I remain happily long.

Oct 06 08:41 PM