Dollar up commodities down, stocks up oil up, stocks down, Treasuries up… well, not today. Be wary of the decoupling as new relationships may be forming.
We are thankful we took oil shorts off yesterday for clients, albeit at a small loss being prices were higher by $1.25 today as of this post. Natural gas is higher by 2%, clients were able to buy the January $5.50/6.25 spreads recommended yesterday at slightly better levels today paying $1800/per.
Sugar looks to be starting another leg up, gaining almost 2 cents in the last 4 sessions. We have light long exposure and will be shopping ways to add length for clients. Mixed results in the other softs, no standouts. Agriculture was well bid today; our clients' exposure includes long corn and long KCBOT wheat/ short CBOT wheat via a spread.
Silver and gold were convincingly higher in today’s sessions. Gold clearly broke out to new highs on Central bank buying. Call spreads in April is the vehicle of choice though we prefer silver. We bit the bullet and bought most of our clients May $19/22 call spreads today. For straight out futures buy 30/50 cent pullbacks. Middle of the road trade one could sell out of the money calls and buy futures. $16.60 should support pullbacks on the December contract; resistance is seen at the 20 day moving average at $17.30 followed by $18 and then $20.
Clients were buyers of June 10′ Euro-dollar puts today. We were able to get more February calls bought today for clients. We continue to like buying intra-day setbacks in live cattle. We may be shopping some future spreads, stay tuned.
RBA raised rates 0.25% today to 3.50%. D-day with FOMC tomorrow and then ECB & BoE Thursday. Expect violent moves in forex. Most likely we will be selling rallies in the Cable and Euro but not sure at what levels??
Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.
