Nobody likes paying taxes but ideally you made enough money in your trading account that you will need to pay Uncle Sam.
For new entries in Crude start tracking June futures. Price at the moment are unchanged on the day trading just above the 9 day MA. As long as the $84 level holds on a closing basis we feel prices are trending up. A bearish inventory report in natural gas knocked prices down hard today back near $4. We think this will serve as a one off event and would suggest using this set back to get long June futures and July 50 cent call spreads. We would remain in the trade with clients until a new low was made and on that cut losses. Trading natural gas is not for the faint of heart nor does one need a large position as the leverage on this contract is insane…tread lightly.
Stocks higher again without our clients. As we pointed out in recent weekly commentaries a 61.8% Fibonacci retracement in the S&P would lift prices to 1230′ish; we view that level as the line in the sand.
July sugar was lower by 3.40% today but did remain above the 20 day MA. Tomorrow’s action will be key and we will make a decision on whether it makes sense to remain long. The May/October spread was a slight loser; remember we’re expecting May to trade at a premium to October by the end of the month. Cotton closed above the 20 day MA; we are looking to be a seller from higher levels with clients. Soybeans for the fifth consecutive day traded up to close at its highest level in 13 weeks. Clients are wondering how with a huge crop out of South America and the largest crop ever domestically why prices are moving up? Two words…the FUNDS are getting more active as buyers in Agriculture. Forget the fundamentals when funds are buying they do not matter. We have yet to move on shorts in wheat and/or soybeans and will hold off for now. Clients remain active in corn buying July options and December futures.
June lean hogs printed a new high; all shorts should have been taken out at a small loss. With June live cattle gaining 1.50% profit stops should have been hit in early dealings. Stand aside in hogs and cattle for now. We expect gold and silver to move down from these levels before we see any significant upside. Could they move higher from here? The answer is yes but we view the risk too great as we view support 75 cents lower in silver and $30 lower in gold. If the dollar can stay above 80.00 as it has so far this week look to be a seller of the Euro and Swissie on strength. Our favored play remains selling rallies in the Loonie thinking a potential correction in metals and energies is looming.
Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.