Today in Commodities: Seeds of Change

Includes: FXY, GRU, JYN, MOO, NIB, UUP
by: Matthew Bradbard

We hit our downside objective in oil today and would suggest using the recent pullback to start scaling into longs. What we did for clients today was expensive, but we think it should pay off in the coming months. We bought (3) December $75/85 bull call spreads and at the same time bought (1) October $60 put. On a further sell -off we will liquidate the put at a profit and have the option to buy back the $85 calls that were sold. If the recent correction is all we get and prices rally from here, we will cut losses on the put and look to capitalize on the call spreads. Natural gas has moved lower the last 7 sessions, will today make 8 days? We are still buying $1 call spreads for November for our clients. We have gotten a lot of grief, we were early… yes, but we will stay the course and still expect a sizable jump before September ends.

The dollar and yen were higher today with other currencies faltering; this was predicted in our commentary posted this morning. The only plays we see are in the yen; see commentary. Gold and silver hit key support today, overnight and tomorrow will be key. If today’s lows hold we will suggest buying more, stay tuned.

Corn and wheat were lower today, we remain long and are carrying a loss but we will stay the course for clients. As of this post the S&P is lower by 27 points and the Dow by 200. Who predicted this? That is right, we did …see recent posts.. All the softs were lower again today, we are short cocoa with clients and will be looking for long entries elsewhere from lower levels.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Before trading MB Wealth recommends that you should carefully consider your financial position to determine if commodity trading is appropriate for you. All funds committed should be purely risk capital. Past performance is no guarantee of future trading results.