An inside day in Crude as prices look to close slightly higher. We have no exposure with clients but expect prices to drift lower in the short run. Inventory report out tomorrow a day later than normal on Crude and the distillates and on Friday for natural gas. As previously stated we expect the September lows in natural gas to hold and we’re advising clients to buy 50 and 75 cent January call spreads.

Sugar screamed higher today regaining the trend line closing 3.5% higher on the day. December cotton made a new high and failed closing 2.5% lower on the day. We’re pricing out bearish plays for clients… stay tuned.

Crude prices are still trying to decide on where to go from here; for now the 20 day moving average seems to be acting as the pivot point. As we’ve stated, the range remains $81 to $76.50 on the December contract. Natural gas is lower by 19 cents as of this post. Looking at the pattern in recent sessions we are alternating positive and negative days; under that theory, prices should be higher tomorrow. We are getting a lot of investors' resistance to buying natural gas much like we did back in August and September. We all know how that turned out…stay tuned.

Cocoa was down by $70 today; those short futures trail your stops. It would happen like this as clients' December puts expired worthless yesterday! Sugar broke the trend line closing below 22 cents, we advised clients to stay long but they are down on their position. Coffee prices traded through the trend line losing 4.25% today. We will examine longs from lower levels; support in December is seen at 1.32 and then 1.29.

I believe the 2.5% move higher in Crude oil today was more of a dollar weakness story than an oil strength story. Will it continue?? We expect $76.50 and $81 to contain prices on the December contract in the short run. As we said in our commentary this morning, we prefer to be a buyer from lower levels for clients. We’re advising clients to buy 50 & 75 cent bull call spreads in January natural gas. Though prices printed a new low it appears prices will close higher on the day.

As of this post the Dow is higher by 200 points and the S&P by 22, the largest 1 day swing we’ve seen in several weeks. This carries the Dow to a new '09 high and we should see further appreciation. The S&P should trade up to 1100 this week if not next. We may look to get clients short but not yet.

Well, it looks like we only loss 190,000 jobs last month but the unemployment rate ticked above10% to its highest level since April of 1983. What recovery? I don’t see a recovery; just because prices of stock and commodities have moved up we’re NOT back on track. As for the markets, with more people out of work I guess the demand for Crude oil is perceived to shrink?? Oil fell almost 3% today. Who know from here; I’m getting mixed signals. Natural gas prices ended lower by 4% today and 8.5% on the week. We hold January call spreads for clients and expect a push higher very soon. We have yet to pick a bottom in futures but are getting close.

Stocks could go either way though I was impressed by this week’s action. If forced to pick a direction I would say up but it will be with out my clients. Gold did print above $1100 but we will settle below. I feel there is much more upside but do not rule out a healthy correction in the short run. Clients remain long silver; we would like to see a probe to $18 next week. On a pullback that holds $16.20 on a closing basis we would suggest adding to the position.

Oil is still trying to making up its mind on where to go. We have no opinion or positions currently but will most likely have suggestions in the coming weeks. Natural gas looks to close at slightly better levels, we still like 75 cent January call spreads.

Fresh short entries in cocoa enjoyed sliding prices but unfortunately for December puts, too little too late. Sugar gave up 3.5% today; we bought yesterday for clients…not the best timing. We continue to think March will return to 25/26 cents. The trend line all year comes in around 22 cents, if this level gives way we may re-evaluate.

FOMC: No change in rates and no significant changes in the verbiage as expected. There was mention of inflation expectations but excessive and extended remained in their statement. The problem I see with no change in their course is they are headed down the wrong road, the market is giving the Fed too much credit on getting their timing right. I’m not smart enough to know if they move too early or too late but I’m confident they will get it wrong.

As for the markets, the dollar has started its move lower and virtually all commodities benefited. Oil should close back above $80 as we will be looking for long opportunities for clients. Clients are getting hit on their recent purchase of natural gas, prices are down by 3.5% today… stay the course. Equities trade higher but at this moment we have no opinion, it could go either way?

Dollar up commodities down, stocks up oil up, stocks down, Treasuries up… well, not today. Be wary of the decoupling as new relationships may be forming.

We are thankful we took oil shorts off yesterday for clients, albeit at a small loss being prices were higher by $1.25 today as of this post. Natural gas is higher by 2%, clients were able to buy the January $5.50/6.25 spreads recommended yesterday at slightly better levels today paying $1800/per.

Oil traded to new lows but lower levels could not hold. We advised clients to take their January put spreads off at break-even and moved that money into longs in natural gas. Natty prices were lower by 4% trading to their lowest level since mid-September. Prices have moved lower 8 out of the last 9 sessions, a move we feel is unsustainable. Clients bought January $5.50/6.25 call spreads for $2100.

Cocoa has formed an interim top; for new entries we would advise selling rallies with stops above the recent highs. December puts are running out of time for clients, we need prices to collapse. Sugar moved higher, we will re-evaluate long entries for clients and may be willing to buy higher than previous stated levels, stay tuned. OJ was lower by almost 4%, clients put in gtc profit orders today on their January puts. Coffee was higher by 5% today, on what was rumored to be fund buying. We have no client exposure.

Short covering, month end, dollar rally, call it whatever you want. Here is the scorecard: short Crude oil, short the S&P, Short Euro-currency, Long the Yen, short silver, long Treasuries (NOB spread).

We advised using today’s’ retracement in corn to buy or get positioned in a portion of the corn you want to own into the USDA on November 10th. Additionally clients were buyers of February live cattle on today’s setback. Clients bought futures and at the same time just out of the money puts. They were not filled on their limits on calls, will try again next week.

It is as if yesterday never happened, as most markets have completely reversed their losses or gains. We do not trust the Q3 GDP number and therefore will wait for confirmation to see if the action today is real.

Natural gas has traded below $5 but we’ve yet to make a move on behalf of clients. Oil was higher by 3% forming a bullish engulfing candle. This may carry prices back to the recent highs; we remain short via put spreads for clients and are slightly under water.

The dollar rally looks to be real and markets are feeling the effects. As we’ve indicated, most of our current positions are factoring in a moderate dollar rally before an about face and move to lower lows.

Crude was lower by virtually 3% as we near our targets on shorts. The last 4 sessions the futures have made lower highs and lower lows… to me this means prices are moving lower for now. We’re thinking about $2 lower and then we will offset clients' shorts. Natural gas was punished another 4% today with prices nearing $5 on the December contract. We’ve started pricing out bullish plays but it may wait till next week, stay tuned.

If the dollar does in fact rally and this is not another head fake expect a wash out. Oil made a new low but buyers came in, tomorrow’s inventory report will be the “X” factor. We’re still expecting a sell off to $75ish but will need some help from the dollar. A falling stock market would also help as the correlation is strong.

Natural gas is getting close to our $5 objective, we’ve started to price out January call spreads and may try a futures entry, stay tuned. Softs were uneventful; cocoa was lower for the third straight session but we need a collapse at this point for open positions to play out. Sugar is on our radar but we’re expecting a trade lower before making a move for clients.

If the US dollar was to rally, what to do? Crude oil is down just over 2% as of this post and if prices were to close lower this would mark the first consecutive lower closes since late September. We maintain that on a further dollar appreciation Crude can come down $5 plus; the 38.3% Fibonacci retracement in December is at $75.70. Natural gas traded lower for the fourth consecutive session, losing 12% in that time. We suggest waiting for a trade below $5 to re-examine long opportunities.

Equities are down 1% as of this post; our targets remain the 50 day moving averages; in the Dow futures at 9600 and the S&P at 1040.

Oil appears to be stalling after a very impressive move... could it be the US dollar is finding footing? If prices fail to trade above yesterday's high at $81.99 on the December contract we should have an interim top in place. We have clients positioned in bear put spreads in January. Natural gas should move lower in the coming sessions. A forecast for colder weather could cause a spike higher in the immediate term but storage continues to build. We are on the sidelines but will explore longs after a break of 40/60 cents.

OJ started to rollover; our first target would be the gap in the chart about 5 cents lower. Clients are short January, expecting a trade back near $1 in the futures. Sugar broke lower; we would like to see a trade back near 21 cents to re-establish bullish plays for clients.

Neither scenario -- being early or late to a trade -- is ideal, but I would rather myself be in early. I am convinced that is the case with our most recent oil trade. We advised clients to get short via options yesterday, followed by a 3% rally today. We expect a trade back to $75 on the December contract. Trades from yesterday are showing about a 20% depreciation. We still like the trade.

Soft commodities were higher across the board but nothing out of the ordinary. Stock indices remain range bound waiting for the next leg. A move back to the 50 day moving averages is what we’ve been calling for; in the S&P at 1038 and 9570 in the Dow.

Natural gas prices were higher by 7% today, we advised clients to take their positions off and book a profit on the overall trade. This time the hedge hurt instead of helped, but sometimes being conservative makes you less money, other times it saves you money. Clients booked a profit of $1200 on their January $6/7 call spreads and a loss of $400 on their November put protection; a total gain of $800 on roughly $3100 invested.

Change of plans on the Crude - we were expecting a dip to get clients positioned long but instead we’ve decided to get short buying January $80/75 put spreads today. A 23% appreciation in less than 3 weeks seems too much too fast.

There are numerous ways to play long oil, short Treasuries or for that matter any and all of your investment conclusions. We will be looking for ways to further our exposure in long energy for clients but at this point only hold longs in natural gas. We do feel that prices of Crude and the distillates are trending higher but we’re currently on the sidelines wanting to get long. Not the best place to be but I guess better than in the market wishing we were on the sidelines.

With prices probing the $80 level the path of least resistance is up. We prefer natural gas only because we feel we’re in the beginning stages of a move as opposed to oil which, though on a tear, is further along its move, again just our estimation.

While short or long is only a difference in direction, why do traders have a problem getting short? Maybe it is the psychology; perhaps it is easier to cheer for an asset to move up rather than down. To be extremely successful in this volatile environment we think a long-only mentality is not the way to go.

Why I touch on this is: though we are bullish a variety of commodities, we have and will continue to suggest shorts in futures or put options when we feel a drop in price could occur.

Most people are wrong so I generally do not want to do what the herd is doing. Short dollar, long metals and long equities have been great for momentum traders but all three are looking way too crowded for my liking. Crude broke out to the upside today. We had suggested waiting for a setback before buying again but we may re-evaluate depending on how the trade looks going into the weekend. Yes, the daily chart looks toppy but visiting the weekly chart this move may have legs. It may be premature to enter long futures in natural gas but we did issue a trade recommendation in January call options today to clients. We advised buying the January $6/7 call spreads for $2500.

Sugar was higher by 5% today; it appears we may reach our objective of 25 plus cents sooner than expected. Be prepared to take a profit in coming sessions on a spike. Cocoa was higher which is against our clients positions. It may be just too much to pick a top or even ask for a correction. We may cut losses in coming sessions so stay tuned. Today’s rally partially failed in cotton, if the stock market comes off expect cotton to sell off hard, just a heads up. Grains were lower across the board with the exception of soybean oil which was largely buoyed by the gains in Crude.

Don't fight the tape - or, the trend is your friend. When putting on a large position try to go the way of the trend. That is not to say playing setbacks and reversals cannot be profitable -- many of my best trades were exactly that -- but position traders generally do not establish bearish plays in a bull or market or bullish plays in a bear market.

A few examples... short the indices, a trade our clients are in may not be the best call. Picking a top in gold or silver could be suicide in this environment.