Oil gained virtually 4% today and is $4 off its lows yesterday. As soon as we get through the 9 day MA we expect to see more buying; that level is just above today’s high. From here we see a grind higher to $76/barrel. That being said, we expect heating oil and RBOB to trade higher. Our first objectives would be $2.06 in heating oil and $2.10 in RBOB. Natural gas traded but failed to close above the 9 day MA. Clients trailed stops and were stopped out at a profit today. We will continue to buy near $4 for clients and trade the range.
We would hope to see a larger rally in equities to institute shorts for clients in the ES once again. We expect to see buyers emerge between 1050-1060; if that level holds we would expect bulls to be able to push prices to 1125-1150 and we will re-establish shorts for clients.
It was an inside day in October sugar but as long as the 15 cent level holds we like having clients long via futures or options. We’ve yet to make a move but we’ve started to price out bullish strategies in September coffee… stay tuned.
Aggressive traders could buy November soybeans and December soy meal with stops below the recent lows. Our favored Ag play is long exposure in corn as most of you know.
30-year bonds traded below 124′00 for the first time this week but failed to close below that level. Clients are positioned short, thinking a trade to 121-122′00 is in the immediate future. We continue to advise clients to buy puts and to short futures in June and September 2011 Euro-dollars.
August lean hogs gained 1% today, lifting prices to the down sloping trend line. Clients may need to adjust their profit order to a lower objective… stay tuned.
Gold is back above $1200/ounce, gaining for the third consecutive session. Clients have yet to gain exposure but we are likely to see a new high in the coming weeks. We will likely have some bullish plays in the coming sessions. The only reason we’ve failed to get in with clients is most of our clients are long silver and we feel both metals should yield the same result in the short run. Today silver gained 2.10% vs. gold at 1.10%. We’re expecting silver to trade above $19 in the coming weeks and will remain long with clients as long as $17.40 supports.
Risk to reward, two viable plays we see in currencies is long the Loonie and Pound. Our targets are .9650 and 1.4750 respectively.
Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.