As of this post September Crude is lower by 1.4% but prices did hold above the 9 day MA. $94.50 in this contract will need to hold on a closing basis for me to maintain my bullishness. Natural gas has appreciated nearly 13% in the last two weeks and at this juncture we are advising the sidelines anticipating re-establishing longs from lower levels for clients. Equities broke down today trading to a three week low as bearish momentum is gaining. A close at current levels; in the S&P below 1305 and below 12300 in the Dow we would become a seller on rallies with aggressive clients. Continue to use the 50 day/100 day MA’s as your pivot points. Nothing to me screams buy or sell but those looking for a trade could fade rallies in the commodity currencies; Kiwi, Aussie and Loonie. Gold hit another record high today settling above $1600/ounce gaining 8% in the last two weeks. We are bullish in the intermediate time frame but we expect a correction in the immediate future of $30-40…trade accordingly. Silver appreciated 3.5% today lifting prices to three month highs. Like gold we are bullish but are expecting a correction in the immediate future. A 20% appreciation in two weeks in our opinion seems a bit much. We would be looking to buy a break back under $38/ounce in the September contract.
The entire live stock complex was hit today with lean hogs lower by 1.23%, feeder cattle by nearly 1% and live cattle by 0.90%. Perhaps the biggest news was not the movement but the lack of as pork bellies were de-listed from the CME. The near 5% dip in live cattle has us interested in probing longs for aggressive clients very soon…stay tuned. Sugar remains a sale as we expect prices to head south trading back near 25 cents/lb. Cotton and coffee continue lower as they have been two of the hardest hit commodities in recent weeks. Since the beginning of June cotton has lost 30% of its value and coffee from the beginning of May has lost 20%. Wait for a further correction in grains before buying wheat, corn or soybeans remains our suggestion. Buyers were absent from Treasuries today and with some of the big players calling for higher yields which would equate to lower pricing. On a trade through the 20 day MA’s we may be interested in bearish exposure with clients in 30-yr bonds or 10-yr notes…stay tuned.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.