Today in Commodities: Egg on My Face

|
 |  Includes: AGF, BAL, CAFE, GAZ, GLD, MOO, OIL, SLV, UDN, UUP
by: Matthew Bradbard

Taking profits too early and trying to pick tops sometimes makes me feel like egg is on my face. We would not suggest piling into longs but today’s action in Crude is why we’ve been recommending scaling into longs on the way down. We think there could be more downside but the charts are starting to look friendlier and the situation in the Middle East is not going away. Natural gas gave up 1.5% today but the lows are still intact so we suggest buying at these levels. On a new low we will likely cut losses for clients…stay tuned.

The US dollar is back below the 20 day MA so we should see upside in the other crosses…trade accordingly. Fresh contract and record highs in live cattle…so much for the pullback! The adage is you cannot go broke by taking a profit but clients certainly left some money on the table leaving cattle longs too early. We still are searching for bullish exposure but only on a break. Gold was higher by 0.60% today while silver was higher by 3.60%. Our ratio spread would’ve worked out perfectly but we left it in recent sessions. Metals need to set back especially silver before we will re-establish longs for clients. Our only exposure is an April bearish options strategy in gold established yesterday. Cotton was higher by limit again today, all I have to say is suspend your disbelief and get ready to pay more at Brooks Brothers, Armani and the like. Coffee was higher by 2.7-3.5% today depending on the contract month. Not a good day for our bearish options plays. Corn was higher by just over 3% today… my advice is buy dips in new crop. As for our clients' soybean spreads they got hit for 6 cents ($300) today. We still like the trade…see previous posts.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.