Today In Commodities: Prepare For NFP

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 |  Includes: AGF, BAL, CAFE, CORN, GAZ, GLD, MOO, NIB, OIL, SGG, SLV, SOYB, UDN, UUP, WEET
by: Matthew Bradbard

I think the number is fabricated but nonetheless it is a market mover so prepare for tomorrow’s jobs number. As of this post Crude is lower by 1% about in the middle of today’s range trading lower for the seventh consecutive day. I think we see an additional $3-4 retracement before we run into serious support. If that assumption is correct, expect heating oil and RBOB to lose 10-15 cents. Hello volatility…with 7% moves on a daily basis up and down I no longer have the stomach for natural gas. Support is seen at $2.35 with resistance at $2.75 for those braver than me, good luck. Equities are back above their 9 day MA’s but I would suggest the sidelines into tomorrow’s jobs number.

Gold moved higher to confirm that the upward leg likely has further life in it. Next resistance is seen between $1805-1810 but I smell a correction so have advised clients to tighten stops and lighten up on longs. Silver penetrated the key $34 level today gaining 1.5%. We could see prices drift as high as $36 but I would pare position size down because we are due for a correction. Copper led the metals higher and if you notice, prices have started to roll over in recent dealings, so gold and silver should follow suit very soon in my opinion. Inside day in the dollar index as prices failed to make a new low. If we hold 79.00 into the weekend aggressive traders could be buyers trying to capitalize on a dead cat bounce. Other crosses appear to be overbought and due for a correction but I would wait for signs of a top as opposed to picking a top as that has cost my followers a few dollars on recent recommendations. OJ traded below $2 but managed to push back above that level by settlement. We continue to see more downside in the weeks to come…trade accordingly. Grains are starting to show signs of exhaustion as corn and soybeans could not hold onto gains, and wheat lost 1.7% today. $6.73 is the 38.2% Fibonacci retracement level and we need to get through that level in the next few sessions to see higher ground. On a correction prices would likely fall to $6.30 and on a trade higher the next resistance is at $7.00-7.05 in March. Wait for a trade closer to $1.29 in April live cattle before re-establishing longs. Lean hogs lost ground for the first time in five sessions but in my opinion we still have significantly more upside…scale into longs with a target of 95.00 in April.

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