Today in Commodities: Suspend Your Disbelief

“Suspend your Disbelief” -- that is what a manager of mine said to me 4/5 years ago when at the time I was buying out of the money Crude oil calls. I find myself thinking the same thing today when buying gold call options for clients at a record high. He was not capable of calling a top there in Crude and I am not capable of calling a top here in gold.

We missed an epic rally in metals last week as we were out of the office. The train has left the station and albeit en route, we have chosen to jump on, suggesting clients to buy $100 call spreads today in April 10′ gold. We suggest waiting on silver for now.

Natural gas was lower by 6% today. We are looking for a touch more before getting clients long. We advised clients to exit or at least lighten up on their December oil. On the next setback we will be looking to trade January or February from the long side.

Cocoa closed near the lows today but we still have some work to do on our puts. On a trade down to 2850 exit the trade. Sugar caught a bid today with March gaining 5%, we advised clients to get long after the 17% correction in the last 2 weeks.

As we voiced in our Commodity Update this morning we like buying dips in corn, wheat and soybeans in 10′ contracts.

The stock market seems to be running into resistance or perhaps could be taking a breath for the next leg up? The next few sessions will be the tell. We have no strong opinion on Treasuries, the short term trend is down but the 40 day moving average seems to be acting as solid support. Stay tuned. Continue to buy dips in December and February live cattle. As for the currencies, will the dollar ever rally? We think so. We advised clients to buy back their lower leg in their Euro put spreads. Contact us for clarification.

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

[Matthew Bra...:]

www.mbwealth.com/artic...

Who's the Jackass now? Report written in Nov 08' when prices of silver were $9/ounce. Pacwoman maybe you should look at our recent posts before making any rash judgements on our trades. And yes guilty as charged I took a weeks vacation, I suggest you need some time off work as you seem to be very angry.


On Oct 13 05:54 PM picman wrote:

> Here's another idiot. We recommend buying Gold but hold off on Silver.
> What a moron. These two commodities go hand in hand almost all the
> time. Gold has soared above $1,000 and this jackass was on vacation.
> So he misses the boat but advises jumping on anyway. thats like saying
> the jets are favored by 7 points this week but ask me at the beginning
> of the fourth quarter what team to bet. I have been on board with
> Silver since late August and all along i've stated that jumping on
> and off the Silver bandwagon is foolish since its so hard to know
> highs and lows. Bottom line, as I said over a month ago, Silver breaks
> $20 an ounce before the year is over. These bandwagon jumpers are
> completely useless always giving us advice after the fact. How do
> these clowns get these jobs anyway???? Goooo SLV! right through $20
> and what Merry Christmas those of us with faith will enjoy!

Oct 13 06:48 PM

[Plasmo:]

Your commentary is superb, Matthew. It's what got me into commodities. Please keep posting. I think gold is in the process of purging all remaining short positions, and may continue up for some time.

Oct 13 07:31 PM

[rrdaniel:]

Calm down picman and show (learn first ?) some culture.
I trade in oil and sugar, and I'm finding Matt's posts
very valuable.

On Oct 13 05:54 PM picman wrote:

> Here's another idiot. We recommend buying Gold but hold off on Silver.
> What a moron. These two commodities go hand in hand almost all the
> time. Gold has soared above $1,000 and this jackass was on vacation.
> So he misses the boat but advises jumping on anyway. thats like saying

Oct 13 07:57 PM

[Value Added:]

Thanks for the commentary, Matthew. I'm long in all four precious metals - my thinking is that all four will perform well, with platinum giving the lowest return, and gold in the middle. My diversification is actually a position against the dollar; I believe the dollar's prospects are poor long term, despite occasional rallies. For similar reasons the only stocks I hold now, other than Abbott Labs which I've owned for decades, are foreign funds focused on Brazil, India, Korea, and others, excluding China and Taiwan. Everything else looks oversold to me, just my opinion based on historical ratios. I'm curious as to why you think the dollar will rally. Again, thanks for your post.

Oct 13 08:06 PM

[rick12345:]

hah, long precious metals. We'll see how well your precious metals do when the dollar bounces back. Intel's earnings announcement suggests the economy is bouncing back at a stronger level than expected. You forget that these companies sell worldwide, and not in the US only.

Oct 13 08:37 PM

[Gls.:]

Don't underestimate that silver just because the COMEX has got a headlock on it...what the Comex doesn't realize is that supply and demand is coming up behind it with a Big Bat !

Oct 13 09:03 PM

[Andiroo:]

Hi Matt - i gotta say people around here give you a seriously hard time. Me thinks they need to spend more time doing there own analysis and making money than chucking around the abuse!!

Anyway, interested to see what trade you suggest for getting back into NG. Working for me has been a neutral trade of selling UNG and buying to an equal value CHK and EP. It's worked well so far but interested in your thoughts on the next leg.

Thanks for efforts.

Oct 13 09:56 PM

[djj420:]

Telling clients to get gold exposure NOW? Forget your vacation last week- where have you been for the past 5 or 6 years?

Oct 14 07:28 AM

[Mayascribe:]

Matt: It's hold your nose and dive into the deep end and go long gold, silver and paladium.

Not the bullion, but choice selected miners will out perform.

Oct 14 09:53 AM

[Boxed Merlot:]

Nothing would thrill me more than to see a return of the dollar's strength. For the life of me however, how can this be done authentically without a return of (productive) employment?


On Oct 13 08:37 PM rick12345 wrote:

> hah, long precious metals. We'll see how well your precious metals
> do when the dollar bounces back. Intel's earnings announcement suggests
> the economy is bouncing back at a stronger level than expected. You
> forget that these companies sell worldwide, and not in the US only.

Oct 14 10:07 AM

[GMiki1:]

The dollar can strengthen along with strong gold. Ah, yes. Because many traders know a stronger dollar doesn't mean more purchasing power. Anyway, the dollar isn't strengthening and the federal government doesn't want it to. As for silver, I have a lot in silver, but yesterday it was a tad weak. It's going to shoot the moon--we just don't know the timing. On anything. Nothing goes straight up. But sometimes it seems to.

Oct 14 11:45 AM

[jeffgroove:]

LMAO!!!


On Oct 13 06:48 PM Matthew Bradbard wrote:

> www.mbwealth.com/artic...
>
> Who's the Jackass now? Report written in Nov 08' when prices of silver
> were $9/ounce. Pacwoman maybe you should look at our recent posts
> before making any rash judgements on our trades. And yes guilty as
> charged I took a weeks vacation, I suggest you need some time off
> work as you seem to be very angry.

Oct 14 01:45 PM

[picman:]

And how many times since that $9 an ounce did you change your position and suggest selling silver??? You conveniently omitted those 25 articles. The only anger here is generated by morons who claim to be experts but change their position every other day when the market switches direction. When was the last time you advised going with a stock for the long haul and then not reverse your opinion in an article soon after. My guess is never. You so-called "experts" are anything but. In fact you're more of a butt than an expert.


On Oct 13 06:48 PM Matthew Bradbard wrote:

> www.mbwealth.com/artic...
>
> Who's the Jackass now? Report written in Nov 08' when prices of silver
> were $9/ounce. Pacwoman maybe you should look at our recent posts
> before making any rash judgements on our trades. And yes guilty as
> charged I took a weeks vacation, I suggest you need some time off
> work as you seem to be very angry.

Oct 14 11:21 PM

[picman:]

09/30/09
Gold and silver were higher and we are short silver with clients and on the sidelines in gold

09/25/09
When it is time to buy silver, which we expect will be in the coming weeks

09/10/09
We suggested for clients to take off the remainder of their silver longs.

Can you make up your mind? "When it is time to buy silver" - I thought that was at $9 an ounce. See what I mean. You change positions on these things as often as the feeling moves you which is usually the "trend" going on in the market. Whatever happened to investing in something for a period of time greater than a week or month? Or perhaps that's all you so called writers are.... day-traders who play Monday morning quarterback. When was the last time you wrote an article, recommended a stock and didn't change that position for say 6 months? Has that ever happened???

Oct 14 11:33 PM