Today in Commodities: Just Another Friday the 13th

Crude oil was lower again today finding support around the 38.2% Fibonacci retracement level at $75.70 on the December contract. The path of least resistance appears down, being prices did not move higher today with stocks rallying and dollar weakness. Intraday, natural gas traded below the September lows but it appears we will close above those levels. We suggest long mini-futures with stops below the September lows on a closing basis and 50 and 75 cent call spreads for the month of January.

Softs were mostly uneventful, but reflecting back on the week, lumber has quietly advanced $13 on the January contract and almost 20% in the last month.

1100 continues to act as tough hurdle for the S&P to overcome; without taking out that level next week we think a move lower will follow. We are currently not predicting a crash but a trade back to 1025 in the S&P and 9500 in the Dow is not out of the question.

Sideways action in the metals with both gold and silver pausing; gold ending the week slightly higher and silver slightly lower. We like longer term bullish strategies but still expect a move lower in the short run. We are losing on our recent gold put purchases and win or lose expect to be out by mid next week. If the dollar can ever get off the mat we would expect a test of $1086 and maybe even $1075 next week.

We lightly worked our way long the corn market getting back in March via call options for clients and we will be looking at re-entering futures next week. In the Treasury complex 30-yr bonds gained on 10-yr notes; we expect this to continue as long as prices are moving higher. We have clients positioned in NOB spreads long bonds and short notes.

Live cattle were higher today, believe it or not. We advised clients to buy February calls and to lift their put protection against their long futures. We are fairly confident the weak longs have been shaken out and believe at these levels February futures are a buy.

We cut losses on the put options we bought yesterday in Euro-currency at a $75 loss/per. We will stay with the Pound shorts for now.

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

[Nextel Acce...:]

Enough of the Spam already!!!!

Nov 14 11:09 AM

[User 423635:]

what do you think of ung as purchase/hold at this low price of gas

Nov 14 11:55 AM