January Crude continues to dance around the $100-102 level unable to find direction now for the last week. We favor scaling into to bearish positions at these levels, expecting a break back near $90 in the coming weeks. Natural gas lost nearly 2% today as warm weather and lack of demand have hindered any upside. Aggressive clients sit on small bullish positions but it has been dead money now for the last three weeks. Wait for a close back above resistance before committing more capital.
Equities closed slightly higher today, making it seven out of the last eight sessions. A positive close has gotten prices higher, but not much, as the S&P has been in a 20 point range and the Dow in a 225 point range -- very little progress. Muted action in currencies with the biggest mover being an appreciation in the Pound. We see no new trade signals and are prepared to take a loss in the Yen with some clients unless we see a major break in the next few days; stay tuned.
February gold bounced off the 100 day MA, closing 0.75% higher today. Clients remain on the sidelines. Silver, a commodity that is generally all over the place, was like watching paint dry with a narrow range today. The sideways congestion continues and we do not want to guess higher or lower from here; wait for a clearer picture.
Sugar was lower by nearly 5% and coffee got hit for 2.5%. Sugar is back in sell mode and a breach of 22.70 in March could get ugly. The 20 day MA continues to cap additional upside in coffee, and on the breach of the triple bottom that has held for several months we could see a sale at Starbucks. Let the Euro-dollar work higher as we should see a challenge of the contract highs and still be able to sell from higher ground…stay tuned. Corn and soybeans continue to base out though wheat appears to challenge their recent lows with a 2.6% drop today. We have no suggested trades in agriculture currently. The selling in live cattle is slowing but we still are in bear mode thinking there is further downside; trade accordingly. As long as the recent highs act as resistance lean hogs should see further downside as well. Run stops in February around 89.50.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.