I generally report on what happens today but how money is made is anticipating what will happen tomorrow. There are no major moves that I am forecasting in the immediate future…it remains a traders market so the key is to manage all your individual positions. Monitoring risk and booking profits. Quietly Crude oil has gained ground six out of the last eight sessions. I suspect in the short run we can get a probe near $104/barrel but daily charts are starting to look overbought so unless circumstances are heightened in the Middle East I am still expecting a range bound market and oil to trade back near the mid 90′s in coming weeks. Heating oil and RBOB continue to inch towards one year highs but like Crude oil prices are approaching overbought levels. So in terms of the up cycle I think we are approaching extremes. Protect profits on longs. Natural gas traded higher by nearly 6% today as the back and forth action continues. Until prices get out of this 25 cent range look elsewhere.
Stocks fought back today to retake the 9 day MA and get back previous day’s losses. An interim top is likely being made but if we make a fresh 2012 high I would cut loses on all bearish trades. Gold and silver closed near their session highs today after reversing early losses. This was a positive development as selling was rejected in both metals. As long as silver stays below $34 and gold below $1700 I remain bearish thinking more selling is due. Cocoa appreciated 2.5% today to close above the 100 day MA for the first time since late August. Expect further upside and now use the 100 day MA as support. Day seven of a coffee sell off that is showing no signs of letting up. Trail stops on bearish trades and let the markets take you out…hopefully at lower levels. Fresh contract high in live cattle today. I am willing to buy a dip…if it doesn’t happen I’ll miss the trade…cannot be in them all. Mixed bag in Agriculture today with the soybean complex lower and corn and wheat higher. I favor buying a break. The dollar index traded up to but failed to take out the 50 day MA. A level that had not been obtained in almost one month. My expectation is that on the net attempt prices will get through that level moving toward 82.00 in March.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.