Today in Commodities: November Kicks Off with a Bang

Oil traded to new lows but lower levels could not hold. We advised clients to take their January put spreads off at break-even and moved that money into longs in natural gas. Natty prices were lower by 4% trading to their lowest level since mid-September. Prices have moved lower 8 out of the last 9 sessions, a move we feel is unsustainable. Clients bought January $5.50/6.25 call spreads for $2100.

Cocoa has formed an interim top; for new entries we would advise selling rallies with stops above the recent highs. December puts are running out of time for clients, we need prices to collapse. Sugar moved higher, we will re-evaluate long entries for clients and may be willing to buy higher than previous stated levels, stay tuned. OJ was lower by almost 4%, clients put in gtc profit orders today on their January puts. Coffee was higher by 5% today, on what was rumored to be fund buying. We have no client exposure.

Stocks traded lower but buyers are emerging. Clients took off their December ES puts at a slight profit.

Agriculture is a buy on pullbacks. Our pick is long March corn. Today clients were filled on more corn and the KCBOT/CBOT wheat spread at a 4 cent premium to KCBOT. We suggest you own a portion of the grain futures/options you want to own before next week’s USDA report.

Gold and silver were higher but we did nothing for clients. We are pricing out March and May call spreads and expect to move this week.

Live cattle showed strength throughout the day and closed strong. We suggest long futures against puts or buying calls outright.

Results were mixed in forex today; still expecting more downside in the Euro-currency and clients exited their Yen spreads losing the commission on the trade. Tread lightly with Central bank meetings all week.

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

[TonyNed:]

The USO double bottomed at 39.20 on the 60 minute chart and looks poised to rebound.

The GLD has formed a curved bottom on the technical indicators to confirm a reversal from the selloff.

The financials have overextended to the downside the past two sessions and Goldman bottomed on two different indicators when it suddenly reversed mid session. If Goldman is the canary, the market may be poised to move higher in the short term.

Nov 02 04:16 PM

[rrdaniel:]

It's time for natural gas to rebound, it went down too much...

Nov 02 08:32 PM