We may have to admit we’re wrong in the next few days as a number of markets are exhibiting signs of higher ground. Stock, energies and metals could be on the verge of breaking out to new highs and we had previously forecast lower ground. Stay tuned as we may be adjusting our trading recommendations in the coming sessions.
Crude oil is higher by 1.7% lifting prices to 3 month highs with prices approaching $96/barrel. Some clients remain short carrying a loss. If we do not see prices break down below the 9 day MA in the coming sessions we will be advising them to cut losses. Natural gas is lower by 2.3% today at a new contract low. There will be a time to get long but first we suggest waiting for confirmation of a bottom as we see no signs of a low yet. Stocks were slightly higher and it appears that they will close just above the 9 day MA. We favor selling into any further upside thinking we are due for a 5% correction…trade accordingly.
Gold picked up 2.5% today trading to a 2 month high with prices approaching $1800/ounce. $11775 should support pullbacks and on a trade above $1800 expect $1850 to come into play. Silver was higher by 2.7% and as of this post is trading at $35/ounce. We see support at $33.50 and resistance at $35.50. Mixed bag in currencies with very little direction. We remain in our clients' bearish trades in the Yen expecting a further breakdown.
Coffee was higher by just better than 1% today trading higher for the last 3 sessions. We expect further upside and are looking to be a seller with clients on a trade closer to $2.50…trade accordingly. The long end of the curve remains range bound as we see little opportunity long or short in 30-yr bonds or 10-yr notes. On the short end aggressive traders could gain bearish exposure with stops above the recent highs. Agriculture was lower across the board with soybeans the biggest loser giving up 1.7%. We see lower ground ahead in corn, wheat and soybeans. We should have some preliminary estimates tomorrow for Wednesday’s USDA report. Take profits on the remainder of live cattle longs as we are operating under the influence; an interim high has been reached. Those probing longs in lean hogs should have been stopped out on today’s fresh low. We will try scaling into longs again in the coming session once we see signs of an interim bottom. A 61.8 % Fibonacci retracement would drag December lean hogs just under 85.00…trade accordingly.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.