With the Fed hinting at more quantitative easing, do not expect commodities to get inexpensive any time soon. Crude oil has made a higher high now for the last three sessions and on a close back above $100 traders could start scaling back into longs. I see support at $99 followed by $97 in March contracts. Natural gas did trade lower today but if you notice the 9 day MA is holding as support. Traders can scale into longs with stops just below that level. It comes in at $2.56 in March. Stocks will close slightly lower today, only the second negative close in the last fourteen trading sessions. The low was the 9 day MA which continues to serve as the pivot point. On a breach, offset all longs.
Gold is trading $25 above its 100 day MA and on its way to $1750 on the February contract in my opinion… trade accordingly. Silver closed above the 100 day MA for the second day in a row and though prices could get near $35 I think we are due for a $2.50-4.00 correction very soon… trade accordingly. The dollar lost ground today though it pared losses closing 35 point off its lows. My opinion is lower ground still which means higher trade in other crosses. Just keep stops tight as markets are starting to become overbought on daily and hourly charts. Cocoa quietly advanced another 1% today making its way towards its 100 day MA. The highs are likely in on OJ so buying out of the money puts may be a good play thinking we get some retracement off the record highs seen earlier this week. Euro-dollars continue to stair step higher… hold off on short entries but I got to tell you 0.60% at the end of 2013 seems like a good play so we will be giving sell signals… stay tuned. Wheat picked up nearly 2% while corn remained flat. Continue to scale into longs trailing stops. Again I feel we could see March corn above $7 and wheat closer to $7.50 in coming weeks. Exit remaining live cattle longs I am betting an interim tops was made in recent sessions. Traders should have been stopped out of longs in lean hogs at a profit as prices broke the 20 day MA today.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.