It is hard to keep a good man or good market down. For the last five sessions Crude futures have been wondering in a $5 trading range…where now? From here it could go either way so we suggest waiting for a sign on direction. A trade below $95/barrel or $101.60; the 100 day MA in July would likely signal the direction…trade accordingly. We used today’s quiet session to get some clients back into natural gas. Our suggestion would be to play August from the long side whether via futures or options. The indices should gain momentum and move north from here, that would be confirmed by a trade back over the trend line and 20 day MA’s. They come in at roughly the same levels; in the S&P at 1342 and in the Dow at 12595.
We feel the dollar could set back and give back some of its recent gains…perhaps a trade in the June dollar index back near 74.00. If this were to play out we would want to be long the Euro, Swissie or Pound. At the moment currency traders do not have exposure in any of those crosses…stay tuned. Aggressive traders can continue to scale into bullish plays in August or December live cattle looking to add to the trade on strength. Gold held the trend line again inching out a 1% gain in today’s session. We respect the trend but still have yet to re-deploy client money long or short…stay tuned. Silver closed back above the 100 day MA and aggressive traders should find bullish exposure as we think most of the downside has passed for now. We would likely have some bullish suggestions in the coming sessions but at this juncture we think a trade back near $39/40 an ounce is in the immediate future. Sugar advanced 4% today…start booking profits on longs in options and trail stops on futures. We will be moving clients from July contacts to October if given the opportunity on a trade lower in the coming sessions. Continue to gain bullish exposure in the grain market…our favored plays remain new crop corn and soybeans as we’ve voiced in recent posts. Today corn appreciated 3%, soybeans 2.5% and wheat was higher by nearly 6.5%. Clients that previously did not have exposure in the Treasury complex likely do now. In recent weeks we’ve advised bearish plays in 10-yr notes, Euro-dollars and now 30-yr bonds. We will hold these positions thinking an interim top is near.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.