Today In Commodities: Too Little Too Late?

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Includes: BIL, COW, CRUD, DBA, ERO, FXE, FXF, GLD, GRU, MOO, SLV, TLT, UNG, USO
by: Matthew Bradbard

Jobs are being added and unemployment is dropping according to today’s NFP but is it too little too late? The picture economically is bleak and I do not see a quick fix.

Oil is getting support from the Iran situation but with economies faltering globally we should not expect this appreciation to continue -- well, at least I do not expect the movement north to continue. It will take a close back under $100 for me to recommend clients to get positioned short again. Wider swings at tops and bottoms generally mean a trend change may be in the making as natural gas daily swings are expanding. It will take a move above $3.20 in February on good volume but next week the tide may shift; stay tuned.

As long as stocks maintain above their 9 day MA’s I say markets have more work on the upside. That pivot point comes in at 1263 in the S&P and 12245 in the Dow. Back off trading ideas long or short Treasuries as there just does not appear to be enough movement either way to trade.

Gold and silver ended lower today but higher on the week. Do not rule out a setback, especially with a strengthening dollar short term, but I still anticipate higher trade. As I’ve voiced this week another $60ish in gold and $3 in silver; trade accordingly. The grind higher in the greenback also leads to further depreciation in other crosses. Chart damage was done in the Euro and Swissie as the momentum remains with the bears. Forex traders should be selling rallies in almost all crosses.

OJ jumps out as a sale, failing to hold onto gains the last three sessions on the close. As long as we do not see another freeze I feel good about bearish trades with an exit if we see a fresh high. The 11% run up in the last two weeks is likely overdone, in my opinion. Oats are on the verge of making fifteen month lows and that could be setting the tone for what is to come in grains with the majors all losing this week. I think an interim high is in place in corn, wheat and soybeans; trade accordingly. Lean hog traders should be on the sidelines waiting for a lower long entry. Live cattle traders are getting closer to their exit on shorts as prices are down almost 3% in the last two weeks - stay short expecting more.

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