Today in Commodities: Waiting for Confirmation

It is as if yesterday never happened, as most markets have completely reversed their losses or gains. We do not trust the Q3 GDP number and therefore will wait for confirmation to see if the action today is real.

Natural gas has traded below $5 but we’ve yet to make a move on behalf of clients. Oil was higher by 3% forming a bullish engulfing candle. This may carry prices back to the recent highs; we remain short via put spreads for clients and are slightly under water.

The trend line held in sugar we mentioned yesterday as prices gained 4%, we have yet to re deploy money for clients. Lumber was up limit on news that the first time home buyer credit may be extended.

Strong showing in agriculture today, pick your poison. We like longs in March 10′ corn futures and options. Gold and silver were bid higher today, we’ve yet to buy silver but are currently pricing out March and May call spreads in silver. As for futures we would like to wait a few days and at this point a trade to $15.50 would be an ideal entry. All profits were erased for clients in their NOB spread as well. For now we will stay the course. Clients were buyers of 99.00 June 10′ puts in the Euro-dollar today. About $1/2 lower we would suggest buying February live cattle futures. As for options we are looking at the phenomenal open interest in the 90 calls.

A bullish engulfing candle also formed in stock indices. We were a day away from taking profits on client’s short, now we need a lower low. We may sell this rally, stay tuned. We are thankful we took the Loonie shorts off for clients. Unfortunately they remain short the Euro-currency and long the Yen. We still like the trades but are carrying losses after today. We do not think the dollar rally is over though the chart pattern today is bearish…stay tuned. Tomorrow is month end so we see some wild swings, fasten your seat belts.

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

[totheabovej...:]

'bullish engulfing candle'

seriously???

Oct 29 05:28 PM

[ebworthen:]

"...month end, wild swings"

Aye...agreed.

If people really dig into and analyze the GDP numbers they will not trust them either.

Very low volume for a 2% move higher.

Close that window, it's drafty in here, the candles are sputtering!

Oct 29 06:16 PM

[cyclingscholar:]

Confirmation? This economy is so infantile, I think you'll be lucky if it can handle baptism!

Oct 30 01:24 PM

[User 40276:]

any opinion in the copper dec contract?

Oct 31 09:00 AM