Today in Commodities: A Fitting End

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Includes: COW, DBA, DBC, GLD, GRU, MOO, OIL, SGG, SLV, UNG
by: Matthew Bradbard

US dollar is lower again today as the short term trend has clearly turned lower. We could see a test of the previous lows next week at 77.50 on the September contract. Oil continues to have a hard time getting through resistance. If we fail to break through $75 by mid next week, we suggest taking longs off. On a breach of that level, next stop $80. Natural gas was lower today but UNG was higher -- could that be a forward indicator of an impending bottom in the futures? Additionally the forward months held their value, trading only slightly lower. The November$5/6 is where we would suggest looking currently.

Corn held its own today, cannot say the same for wheat. We will most likely now be looking for a rally to cut losses for clients.

Silver and gold were both gainers today, as the 100 day moving averages seem to be the line in the sand.

Why cutting your losses is important…since we advised clients to get out of their S&P shorts the market has rallied 35 points and there seems to be no end in sight. Euro-dollars rolled over today with the flow of money out of the dollars and Treasuries back into risk assets, i.e. stocks and commodities.

It has been a very long time since we’ve had 4 consecutive positive days in lean hogs but it happened this week. October and December are bumping against resistance at the 20 day moving average. Continue to remain long live cattle, see previous posts. We are expecting a significant move in sugar, we have clients covered either way but would prefer a move to the upside. See trade recommendation from yesterday.

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.